What Is An APF Number?
When you apply for a home loan, you make sure that your credit score is good, that you have complete documentation and sufficient funds for 'margin'. You also make sure that it is an approved project of the bank. It is also important to know the Approved Project Financial (APF) Number of the project. Do You know what it is?
MakaanIQ tells you what APF number is, and why it is relevant while applying for a home loan.
What is an APF Number/ Code?
Every project of a developer is expected to have a valid APF number or a code. The APF Number is provided by banks or housing finance companies (HFCs). The APF Number/Code denotes that the project has received all necessary approvals, and that homebuyers can invest in the project without any fear about the credibility of the developer.
Most developers have tie-ups with banks or Housing Finance Corporations (HFCs) who offer home loans to the customers. The APF number makes it convenient for home loan buyers to get home loans and saves them from the horror of collecting legal documents of the project from the developer.
It is important to ask for the APF number or code because it is one of the easiest ways of checking if the project/property is registered, and approved by an accredited bank or Housing Finance Corporation.
How is an APF number assigned?
Developers are expected to submit all the relevant documents like Government clearances, No Objection Certificates (NOCs), Title Deeds, Sale Deeds, Approved Plans, and Freehold/ Leasehold documents in order to prove that the project has all the required licenses and permission. Developers are also expected to submit proofs of clearances from authorities like forest, pollution, fire and electricity board.
The bank analyses these documents along with the Know Your Customer (KYC) check of the builder. Banks and Housing Finance Corporations study the legal and technical viability of the project in detail, and then allocate an APF number.
The APF number is an indicator that the flat/ property will be delivered on time, as promised by the developer. The APF Number is a seal of authenticity. The APF Number tells you that the builder is reputed and authentic, the project was well inspected, and that the repayment of loan is safe.
How do banks decide to allocate APF numbers?
Most banks consider builders who have been into construction business for a while, and have a history of completing projects on time, for at least 2-3 projects. The quality of construction an important parameter too. A few other reputed banks and institutions must also have approved the project. Banks do not consider developers who have been featured in the negative list of the Reserve Bank of India (RBI). The size of projects that are under-construction should be mentioned in square feet. The agreement is signed between the developer and the bank or the HFC. Banks and HFCs insist on a clause that stipulates the actions to be taken after the construction period expire.
The criteria varies, depending on the project and the history of the developer.
What if the project does not have an APF Code?
If the project does not have an APF number, this means that it is not approved by a bank or an HFC. This could be because it lacks some relevant license or legal/ technical approval. This is a red signal for you, as a home loan buyer. If you invest in the project that lacks an APF number, there is no guarantee that the flat will be delivered on time. Make sure you check an APF code before finalising the property. An approved project is always a safe investment.