Buying a home isn’t easy and requires a lot of efforts. It takes in both financial and emotional investment. So, the home buyers who wish to apply for home loans should have a good credit score. Along with that, complete documentation and sufficient funds for ‘margin’.
Whenever you wish to invest in property, make sure that it is an approved project of the bank. And as an aware buyer it is important to know the Approved Project Financial (APF) Number of the project. Do you have any idea about what is APF? If not, then this blog will tell you what APF number is, and why it is relevant while applying for a home loan.
What Is An APF Number/ Code?
Every residential property or a commercial project should have a validated APF number or a code that is assigned by the banks or housing finance companies (HFCs). It is important as it refers that the specific property has received all necessary approvals. It gives an assurance that the homebuyers can invest in the project without any fear about the credibility of the developer.
Usually, a home buyer can see that most of the developers have tie-ups with banks or Housing Finance Corporations (HFCs) who offer home loans to the customers. This particular APF number makes it convenient for home loan buyers to get home loans and ensures the safety from the horror of collecting legal documents of the project from the developer.
It is significant to ask for the APF number or code as it is one of the easiest ways of checking if the project/property for sale is registered, and approved by an accredited bank or Housing Finance Corporation.
How Is An APF Number Assigned?
The developers are required to submit the relevant documents to get like:
- Government clearances
- No Objection Certificates (NOCs)
- Title Deeds
- Sale Deeds
- Approved Plans
- Freehold/ Leasehold documents
In order to prove that the project has all the required licenses and permission, the developers are also expected to submit proofs of clearances from authorities like forest, pollution, fire and electricity board.
Firstly, the concerned bank analyses these above mentioned documents along with the Know Your Customer (KYC) to check for the builder’s credibility.
Banks and Housing Finance Corporations study the legal and technical viability of the project for sale in detail, and then assign an APF number.
What Are The Benefits Of APF Number?
The APF number is advantageous is many ways:
- It is an indicator that the flat/ new launch property will be delivered on time, as committed by the developer.
- It acts as a seal of authenticity.
- It tells that the builder is reputed and authentic.
- As the project is already well inspected by the banks, thus the repayment of loan will be completely safe, ensuring the safety of investment.
How Do Banks Decide To Allocate APF Numbers?
There are few parameters over which the banks allocate the APF number to the properties:
- Most banks consider builders own a good history of project deliveries.
- Have completed at least 2-3 projects on time.
- The quality of construction an important parameter.
- Not only one but also is approved by other reputed banks and institutions.
- They will not consider developers who fall in the negative list of the Reserve Bank of India (RBI).
- The size of under-construction projects should be mentioned in square feet rather than any other parameter.
What If The Project Does Not Have An APF Code?
If any project that does not have an APF number states that the project is not approved by a bank or an HFC. The reason for this could be short of some relevant license or legal and technical approval. So, if you still decide to invest in a property that isn’t allocated with the APF Number, this acts as a red signal for you, as a home loan buyer. Your investment will be at stake as there will be no guarantee that the flat will be delivered on time. Therefore, make sure you check an APF code before finalising the property as an approved project is always a safe investment.