REVIEW OF LITERATURE

FulIbag Singh & Reema Sharma, Survey data on household finance: research
summary, Jan 2009, pp-100.
Housing, as one of the three basic needs of life, always remains on the top priority of
any person, economy, government and society at large. In India, majority of the populations
lives in slums and shabby shelters in rural areas. From the last decade, the government of India
has been continuously trying to strengthen the housing sector by introducing various housing
loan schemes for rural and urban population. The first attempt in this regard was the National
Housing Policy (NHP), which was introduced in 1988. The National Housing Bank (NHB) was
set up in 1988 as an apex institution for housing finance and a wholly- owned subsidiary of
Reserve Bank of India (RBI). The main objective of the bank is to promote and establish the
housing financial institutions in the country as well as to provide refinance facilities to housing
finance corporations and scheduled commercial banks. Moreover, for the salaried section, the
tax rebates on the housing loans have been introduced. The paper is based on the case study
of LIC Housing Finance Ltd., which analyzes region wise disbursements of individual house
loans, their portfolio amounts and the defaults for the last ten years, i.e., from 1995-96 to 2004-
05 by working out relevant ratios in terms of percentages and the compound annual growth
rates. A relevant chart has also been prepared to highlight the results.

D.M. Sukthankar, Housing finance system in India- an empirical investigation,
December 2007, pp- 17.
A shelter program in a developing country for the underprivileged calls for identification
of resource potential, its mobilization and effective channeling. The instrument that acts as the
conduit is a national policy. India, in spite of its pronounced commitment to shelter the shelter
less, did not until now any policy paper in this direction approved by its parliament or the
government. There may still be a gap between the objective and the achievement but a
beginning has been made. For a large country like India, where housing is a state subject and
the policy centralized, there are bound to be areas of conflicts that will have to be streamlined
during the next few years. The author, who had steered the national policy, brings out salient
features that define the role of the government as a facilitator rather than builder. The readers
may find the paper interesting as it covers the entire gamut of the various aspects that requires
government back up which is a prerequisite for launching shelter programmer at the national
level particularly where resources militate against will.

Manoj Joshi & Vidyalaya Joshi, Markets and housing finance, Feb 2008, pp-49
Housing Development Finance Corporation Limited (HDFC) was set up on 17
th
October
1977 by I.C.I.C.I out of the consideration that a specialized institution was needed to channel
household savings including funds from the capital markets in to the housing sector. HDFC
since its seeding has emerged as the largest mortgage finance institution in the country. The
main objective of HDFC is to develop significant expertise in retail mortgage loans to different
market segments, to have a large corporate client base for its housing related credit facilities
and to support or aid in the promotion of home ownership. HDFC is Indias leading housing
finance company and for all practical purposes is synonymous with the domestic housing
finance industry.
The primary objective of HDFC is to enhance residential housing stock and promote
home ownership. One of its major objectives is to increase flow of resources for housing
through the integration of housing financial institutions with the domestic market. HDFC has
developed a strong market reputation, large shareholder base and a unique consumer
franchise. HDFC is respected as Indias premier housing finance company as well as in the
international markets. It has maintained a consistent and healthy growth in its operations while
retaining as a clear market reader in mortgages business in India. The company has constantly
engaged in to innovative practices since its conception.

Bhalla, Ashwini Kumar & Arora, Pravinder Kumar, Housing Finance in India: Growth
and Policy Implications, December 2008, Vol1, pp 59.
In this study, we develop and test a methodology to assess the impact of affordable
lending efforts on home ownership rates. More narrowly, we examine the impact of using
flexible underwriting guidelines, primarily changes in the down payment and housing burden
requirements, on the affordability and home ownership propensities of targeted populations
and geographic areas. The impacts of changing these underwriting guidelines are compared
with those resulting from lower borrowing costs (interest rates). A variation of the methodology
first proposed by Watcher et al. (1996) is used in the analysis. We use the 1995 American
Housing survey (AHS) national core in the analysis. The findings indicate that affordable lending
efforts are likely to increase home ownership opportunities for underserved populations, but that
all groups may not feel impacts equally. Under most affordable products, the impact on all
households, recent movers and central city households are smaller than other households. The
recently introduced affordable products which permit the 3% down payment to come from non-
borrower sources, e.g., Freddie Macs Alt 97, has the largest impact on the home ownership
propensities of all underserved groups, including a 27.1% increase in the relative probability of
home ownership for young households, a 21.0% increase for blacks, and a 15% increase for
central city residents. Consistently, changes in underwriting guidelines are found to have greater
impacts than changes in the costs of borrowing for all groups.

Katri Kosonen, The Housing Finance Revolution, Aug 2007, pp-37
The paper analyzes the pricing of state subsidized housing loans issued by Finnish
banks and other lending institutions in 1995 and the first half of 1996. The state gives an interest
rate subsidy on the loans, provided certain criteria regarding the purpose and the terms of the
loans are met. But the market determines the pricing itself. The pricing of such loans is not
based on any risk considerations. The interest rate margin (the spread between the lending rate
and the reference rate) is much wider on private housing loans than on loans made to corporate
borrowers for the construction or rehabilitation of rental housing. In this sense, Finnish banks
are cross subsidizing the corporate borrowers at the expense of private households. Higher
loan-to-value ratios, longer repayment periods and larger loans in the owner- occupier sector
either do not affect the interest- rate margin or reduce the margin.