FAQ: Can I Get a Home Loan for a Pre-Launch Property?

Getting a home loan for a pre-launch property is difficult — and in most cases, banks will not disburse a loan until the project has RERA registration and the necessary approvals.

Why banks are cautious about pre-launch: A pre-launch project typically hasn't received RERA registration, environmental clearance, or building plan sanction. Banks classify these as high-risk because there's no regulatory certainty that the project will proceed as planned. If the project is delayed or scrapped, the bank's loan is at risk.

What banks require before loan approval: - RERA registration number - Approved building plan - Environmental clearance (for high-rises) - Commencement certificate (for construction to begin) - Clear land title

The financing stages:

1. Pre-launch (no RERA): Banks will not approve or disburse. You must self-fund the booking amount.

2. Post-RERA, pre-construction: Banks may approve the loan but disburse only after the commencement certificate is issued. The first disbursement typically happens at the excavation or foundation stage.

3. Under-construction: This is where home loans work smoothly. The bank disburses in installments tied to construction milestones (CLP), and you pay pre-EMI (interest only on the disbursed amount) until full disbursement.

4. Ready-to-move: Full disbursement at once, with the full EMI starting immediately.

For investors using a subvention plan, the bank loan isn't needed during construction — the builder carries the balance. The loan (if any) is taken at possession, when the property is complete and the loan is straightforward to process.

Our advice: if you're entering at pre-launch, be prepared to self-fund the booking amount. Arrange the loan after RERA approval, and structure the disbursement to match the CLP or subvention milestones.

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