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About the Loan
About ABHFL Construction Finance
ABHFL Construction Finance is designed to support real estate developers in ensuring seamless project completion. Our financing solutions provide the necessary capital to keep construction progressing without delays, helping developers meet deadlines and deliver quality projects.
Used for:
- Funding under-construction residential or commercial projects
- Financing against project sales receivables
- Ensuring uninterrupted cash flow for real estate development
- Structured repayment with escrow mechanism
Why Choose ABHFL Construction Finance?
Key Benefits:
- Structured Financing – Tailored loan solutions based on project cash flow for seamless execution.
- Flexible Loan Tenure – Avail funding for up to 60 months to suit your construction timelines.
- Escrow-Based Repayment – Simplified repayment with an escrow mechanism and structured options.
- Collateral-Backed Loans – Secure financing with mortgage-backed lending and project receivables hypothecation.
- Competitive Loan Amounts – Funding evaluated based on construction cost and project viability.
Additional Advantages:
- Minimal Documentation – Hassle-free process with basic document requirements.
- Transparent Processing – No hidden charges, ensuring a smooth and reliable borrowing experience.
- Dedicated Relationship Manager – Expert guidance throughout the loan tenure.
ABHFL Construction Finance: Eligibility Criteria
Ensuring you meet the eligibility criteria helps in a smoother loan approval process.
General Criteria:
- Applicant Type: Real estate developers, builders, and construction firms
- Project Type: Residential or commercial under-construction projects
- Loan Tenure: Up to 60 months, subject to project timelines
- Collateral: Mortgage of property and hypothecation of project receivables
Note: Meeting these criteria does not guarantee loan approval. Final eligibility depends on credit appraisal, project assessment, and financial stability.
Step-by-Step Guide: How to Apply for Construction Finance?
Securing construction finance with ABHFL is a seamless process designed for real estate developers.
Step 1: Check Eligibility
Assess your project’s eligibility based on cash flow, construction timelines, and collateral requirements.
Step 2: Prepare Documentation
Gather the necessary documents, including:
- Developer’s financial statements
- Project cash flow reports
- Sales receivables proof
- Property and construction plan approvals
Step 3: Application Submission
Complete the loan application form with accurate project and financial details.
Step 4: Document Verification
Our team will review the submitted documents and may request additional information if required.
Step 5: Loan Offer & Acceptance
Once verified, you will receive a loan offer detailing the approved amount, tenure, and repayment terms. Review and accept the terms.
Step 6: Property & Project Evaluation
A thorough assessment of the project’s feasibility, construction status, and collateral value will be conducted.
Step 7: Loan Disbursement
Upon successful verification and evaluation, the funds will be disbursed in phases as per the construction plan.
Documents Required for Construction Finance
Having the right documents ready ensures a seamless approval process.
Personal Documents:
- Identity Proof – Aadhaar Card, PAN Card, Passport, Voter ID
- Address Proof – Utility Bills (not older than 3 months), Passport, Aadhaar, Rent Agreement
- Passport- Size Photographs
Financial Documents:
For Real Estate Developers & Builders:
- Last 3 years’ Income Tax Returns (ITR)
- Audited financial statements (Profit & Loss Statement, Balance Sheet)
- Bank statements for the past 12 months
- Loan repayment history (if applicable)
Project & Property Documents:
- Project Sales Receivables Statement
- Approved Construction Plan & Cost Estimates
- Title Deeds of the Property
- Encumbrance Certificate
- No Objection Certificate (NOC) from local authorities (if applicable)
- Escrow Agreement & Mortgage Documents
Construction Home Loan Questions
Yes, Construction Finance can be used for both residential and commercial projects. Developers working on office spaces, retail outlets, hotels, or mixed-use developments can secure funding based on project feasibility and expected receivables.
The loan tenure for Construction Finance typically ranges from 12 to 60 months, depending on the project timeline, cash flow projections, and repayment structure. ABHFL offers flexible repayment plans to align with project milestones.
Unlike lump-sum business loans, Construction Finance is disbursed in stages based on project progress. Funds are released in tranches, ensuring that money is utilized efficiently as per the construction schedule.
Yes, developers with an existing construction loan from another financial institution can transfer their loan to ABHFL for better terms, structured repayment options, and potential top-up funding.
Construction Finance is available to real estate developers, builders, and construction firms involved in residential or commercial projects. Eligibility is based on financial stability, project cash flow, and approved construction plans.
The loan amount is evaluated based on:
- Projected cash flow from property sales
- Construction cost estimates
- Financial health of the developer
- Collateral and escrow-backed security
ABHFL offers flexible loan tenure ranging from 12 to 60 months, depending on project requirements, repayment capacity, and construction timelines.
Yes, developers can apply for top-up funding based on revised project estimates and additional collateral availability. ABHFL also offers Balance Transfer with Additional Funding for ongoing projects.
The interest rate for Construction Finance depends on several factors, including:
- Developer’s financial stability and creditworthiness
- Project viability and expected cash flow from sales
- Loan tenure and repayment structure
- Market interest rates and risk assessment
ABHFL offers semi-fixed and floating interest rate options for Construction Finance. The semi-fixed option provides a fixed rate for an initial period, offering short-term stability before transitioning to a floating rate. Alternatively, developers can choose a fully floating rate that varies with market conditions, offering more flexibility in the long run.
- Repayments are structured based on project cash flow
- Developers can opt for escrow-based repayment mechanisms
- Loan repayment can be monthly, quarterly, or linked to project milestones
Yes, ABHFL allows prepayment options based on the agreed loan terms. Some loans may have prepayment charges, while others allow partial or full prepayment with minimal fees.
- Late payment may attract penalty charges
- Multiple missed payments could affect creditworthiness
- It is advisable to contact ABHFL for restructuring options if facing financial difficulties
The processing time varies depending on document verification, project assessment, and eligibility checks. On average, loan approval and disbursement take 7 to 15 working days, provided all required documents are submitted promptly.
To ensure a smooth loan application process, applicants must provide:
- KYC Documents – Aadhaar, PAN, Address Proof
- Financial Proof – Last 3 years’ ITR, audited financial statements, and project cash flow reports
- Property Documents – Title deeds, approved construction plan, encumbrance certificate, and NOCs
- Escrow Agreement & Mortgage Deeds (if applicable)
It is recommended to submit a complete set of required documents to avoid processing delays. However, ABHFL may accept initial applications with key documents and request additional paperwork during verification.
Yes, ABHFL offers a Balance Transfer Facility for developers who want to shift their existing Construction Finance loan from another financial institution. This allows borrowers to benefit from better interest rates, structured repayment plans, and additional funding options.
A Top-Up Loan provides additional funding on an existing Construction Finance loan. Developers can avail of this option if their project costs increase or if they need extra liquidity for expansion, land acquisition, or project enhancements. The top-up amount is determined based on:
- Existing loan repayment track record
- Revised project cost estimates
- Additional collateral availability
- Lower interest rates and better repayment flexibility
- Top-up facility for additional funding
- Escrow-based repayment mechanism for better financial management
- Dedicated relationship manager for loan restructuring assistance
If a borrower defaults on their Construction Finance loan, the following consequences may apply:
- Late payment penalties may be charged.
- Impact on credit score, making future borrowing difficult.
- Legal action or foreclosure in case of prolonged non-payment.
- Escrow and collateral utilization to recover outstanding dues.
Yes, ABHFL offers loan restructuring options for developers facing financial difficulties. This may include:
- Revised repayment schedules
- Temporary relief measures (moratorium period, EMI deferment)
- Interest rate adjustments (case-specific)
- Restructuring of outstanding dues into a new loan
To prevent default, developers should:
- Plan cash flow effectively to ensure timely EMI payments.
- Utilize the escrow mechanism to manage repayments.
- Communicate early with ABHFL if financial difficulties arise.
- Explore balance transfer or top-up loans for financial flexibility.
Unlike home loans, Construction Finance loans for developers do not qualify for direct tax deductions under Section 80C or Section 24(b). However, developers may claim interest paid on the loan as a business expense, which can help reduce taxable income under business tax provisions.
Yes, real estate developers can claim GST paid on Construction Finance-related expenses as an input tax credit (ITC), provided the loan is used for business purposes like property development or commercial construction. The ITC can be adjusted against GST liabilities on project sales.
Construction Finance is disbursed in stages, based on project progress and financial milestones. The disbursement process typically follows these steps:
- Initial disbursement after approval and documentation verification.
- Subsequent disbursements in tranches, linked to construction progress.
- Escrow mechanism ensures funds are utilized efficiently.
To verify ownership and legal compliance, the following property-related documents are required:
- Title Deeds – Proof of legal ownership.
- Approved Construction Plan – Sanctioned by local authorities.
- Encumbrance Certificate – Confirms the property is free from legal disputes.
- No Objection Certificate (NOC) – From relevant authorities.
Yes, ABHFL provides Construction Finance for both new and ongoing projects. The loan amount depends on:
- Current stage of construction
- Project cash flow and expected sales receivables
- Approval status and collateral availability
