Investing In Slum Rehabilitation Authority Flats? Know This

In order to rehabilitate and give better livelihood options to those living in slums, Maharashtra government formed the Slum Rehabilitation Authority (SRA) . The authority looks after the redevelopment projects at these slum sites and shifts them to better dwelling units. These dwelling units are built by private developers when all the stakeholders of the particular area give their consent for redevelopment. Such projects are called SRA projects and the units are termed SRA Flats.

There are two types of construction in every SRA project- the owner's component who surrenders the existing area to get a new unit of 300 sq ft and the builder's component which is sold by the developer to recover the cost of construction.

Here are few rules pertaining to SRA Flats, issued by SRA Authority:

 Home loans For SRA flats

Banks fund purchase of SRA Flats only when the lock-in period is over and the buyer has all the approvals from the authority and the concerned parties. Apart from this, the loan is treated as any other home loan where due diligence is done and requires a permit from the SRA Authority.

Risks involved in buying SRA flats

Though SRA housing schemes are attractive but according to an estimate, one-third of the total units are illegally occupied and do not have proper documentation. The beneficiaries sell or rent the unit as soon as they get the possession on the basis of power of attorney rather than sale deed. This is against the SRA norms but hardly any action is taken. Both the parties sign the mutual understanding affidavit but are not eligible for home loan because of its legal status. 

Also Read: Is Housing For All Target Achievable?