US International Development Finance Corporation sanctions $20 million loan for Ummeed Housing Finance
US International Development Finance Corporation (DFC) has sanctioned a $20 million long term loan for Gurgaon-based Ummeed Housing Finance to fund housing needs of the economically weaker and middle-income groups.
The American funding body will provide the debt at a 4.25% fixed rate for 15 years, Ummeed's founder and managing director Ashutosh Sharma said.
«This DFC facility would allow us to extend longer tenure credit to the underbanked population to assist with home purchases, construction, and extension. This will also help us diversify the wagon wheel of liability while the funding is attractive from an interest rate perspective,» Sharma told ET.
The all blended cost of this borrowing including the hedging cost for five years would be anything between 8-9%, he said.
The loan carries a two-year moratorium.
The size of the debt would be Rs 160 crore in local currency and the company plans to start drawing down the fund in the next three months or so. The lender plans to finance around 2,000 low-ticket mortgages with this.
“This is an important transaction that will provide vital financing to support increased access to affordable housing in India,” said James Polan, vice president of DFC’s office of development credit.
The affordable housing finance in India has seen significant traction in recent years and is expected to experience further expansion with increasing urbanisation, a rising middle-class population, and steady policy support from the government.
Given the growth opportunities, Ummeed is planning to raise equity next year from its existing as well as new investors.
