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Housing Finance Companies (HFCs): Meaning and Norms

24 June 20251 min read
BANKING & FINANCEHousing FinanceCompanies (HFCs):Meaning andNorms24 June 2025safalsetu.com

Why in the news

NHB’s tighter refinance norms for under-construction home loans put housing finance companies in focus.

Key facts

  • HFC: an NBFC for home purchase, construction, renovation and residential land loans.
  • Asset rule: 60% housing finance, within it 50% individual loans.
  • Regulators: RBI and NHB.

Role and examples

  • Help buyers who may not qualify for bank loans; more lending flexibility than banks.
  • Examples: LIC Housing Finance, HDFC Ltd (now merged with HDFC Bank), PNB Housing Finance, ICICI Home Finance, Can Fin Homes, Aadhar Housing Finance.

Exam angle

  • Thresholds: 60% and 50%; bodies: RBI and NHB.

Test yourself

1. What share of an HFC's assets must be dedicated to housing finance?

At least 60% of assets must be housing finance.

2. Which body, besides RBI, holds some regulatory powers over housing finance companies?

NHB also holds regulatory powers.

3. An HFC is a specialised form of which type of institution?

HFCs are a type of NBFC.

This topic is part of Daily Current Affairs 24 June 2025 (13 topics).

All topics of the dayDay quizJune 2025

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