Sobha, in their over 2 decades of being in the business, has built their reputation of being the ‘Most trusted brand’ in India through an uncompromising value system of integrity and customer-centricity. Being amongst the industry leaders, the company has shouldered the responsibility to introduce a scheme that is transparent and beneficial to the customer. Here are answers to some questions the customer might have regarding the Sobha Subvention scheme that the company is currently offering on its luxury apartment project – Sobha City, Gurgaon.
What is a subvention scheme?
There are three parties-the buyer, the banker and the developer involved in a subvention scheme. The buyer books the property by paying up to 30% money upfront. The rest is paid by the bank or Housing Loan Finance Company (HFC) in the form of loan to the buyer. The HFC disburses the loan directly to the developer as per construction linked plan with the progress of construction. The developer then bears the interest cost of the loan for a fixed period mentioned in the buyer-seller agreement.
What is the Sobha subvention scheme?
Sobha is offering 10:75:15 Subvention Scheme on select inventory of Sobha City for a limited period. The buyer or investor pays only 10% of total Basic Sale Value within 30 days of booking along with EDC / IDC; 75% will be paid by the HFC as per the construction plan; the final 15% will be paid by customer thereafter as per construction milestones. The buyer is not required to pay any EMI till the Offer of Possession or 31st Oct 2021 (whichever is earlier).
Is this scheme open to all buyers? Or is it conditional?
The buyer has to be eligible for 75% loan from the HFC. If for any reason the buyer is not, or wants to book an apartment without entering into the scheme, they may do so under normal Construction Linked Payment Plan.
Which Home Loan Finance Companies are offering this scheme for Sobha City?
Currently this scheme is available under exclusive tie-up with HDFC Limited and ICICI Home Loans
What are the advantages of buying through a Subvention scheme vs. a regular purchase?
The advantages to a buyer are many – both financially and personally:
- The initial investment is minimal; Rs. 25-30 lakh (maximum), inclusive of EDC & IDC
- No worries of paying EMIs – timely payment to builder is assured by the HFC. This is especially beneficial to those paying rent on their current residence.
- Adequate time for a buyer to accrue savings over next 4 years and plan future cash flows without any immediate liability leading to change in lifestyle
- Existing investments & benefits from them may continue without delaying any investment or lifestyle plans
- Such schemes are usually offered on projects in its initial stages of construction, assuring buyers the best and lowest price on their home.
Are there any possible risks of buying through such a scheme?
As with most marketing schemes, there are certain factors that a buyer needs to be aware and wary of while availing the subvention scheme –
- Default of Interest payment by builder – A builder may for some reason not be able to pay the Interest to the HFC timely for the period of subvention. This will impact the credit (CIBIL) score of the buyer in whose name the loan is taken.
- Some builders provide projects at a price higher than market rates to the buyer under such schemes.
- Wordings of the contract need to be carefully studied. Certain clauses in the contract may not be beneficial to the buyer, such as period of waiver of EMI.
- Under such schemes, usually there is a lock-in period, during which the property cannot be sold or the exit penalty is very steep.
- Tax benefits against loans or property may be different for the buyer as against a regular loan.
- This scheme is linked to the construction plan. So the onus is on the builder to keep to the schedule. Any default could impact the EMI holiday period to the buyer. Hence the credibility of the builder is important.
What are the advantages of buying in Sobha City through this Subvention Scheme?
Over and above all the said benefits of a Subvention Scheme, Sobha City offers additional advantages such as –
- Appreciation – Sobha City is coming up at one of the most promising locations of Delhi NCR – the Dwarka Expressway, where the potential is only northwards. This area has already seen a decent appreciation in the last few years. Customer gets an Entry Price for a premium project at a developing location, since the project has just started.
- Huge savings on just the interest cost; which ranges from Rs. 22.09 Lakhs (for a 1381sq.ft. 2BHK unit) to Rs. 37.48 Lakhs (for a 2343 sq.ft. 3BHK unit), depending on the size of the apartment. The savings for the customer is approx. Rs. 1600 per sq.ft. on the Interest Cost being borne by Sobha till offer of possession.
- Sobha is among the most reputed builders in India with a track record of timely delivery (some projects have been handed over even before the stipulated date.) Timely payment to builder is assured (from the HFC) without any worries of delayed payments or penalties. Timely construction is assured as the builder is obligated to build, with the loan amount disbursed by the HFC. Hence, buying a Sobha City apartment under Subvention Scheme is an extremely low risk proposition.
- Sobha has been awarded – Top brand of Indian real estate sector for 4 consecutive years; Best Professionally Managed Company, EPC World Awards for Outstanding Contribution in Real Estate, top honors in India’s first ever real estate best practices audit report, the most trusted brand, top luxury brand, to name just a few – proving that there’s few who could match it in integrity, quality, transparency and business ethics.
The Sobha subvention scheme on Sobha City is a limited period offer. The best time to buy is NOW.