Housing Finance Company Registration (HFC)

The minimum is ₹20 crore. Paragraph 16 of the RBI (Housing Finance Companies) Directions, 2025 specifies ₹20 crore as the minimum net owned fund for a company to commence housing finance as its principal business. Older HFCs got a glide path, reaching ₹15 crore by 31 March 2022 and ₹20 crore by 31 March 2023. A new company gets no such runway: the full ₹20 crore must be in place before it commences housing finance. Plan the funding first and the rest of the file follows.

There are two conditions, and both must be met. Financial assets in the business of housing finance must be at least 60% of total assets, netted off by intangible assets. Out of total assets, not less than 50% must be housing finance for individuals. This comes from paragraph 10(9) of the Directions. We build both ratios into your business plan from the first year, so the test is never a surprise.

Housing finance means financing for the purchase, construction, reconstruction, renovation or repair of residential dwelling units. Paragraph 10(8) lists loans to individuals for new or old homes and for renovation, loans to builders for residential construction, loans to public agencies for housing, loans for employee housing and slum improvement financing. Other loans are non-housing loans. We check your product list against this definition before you file.

RBI regulates HFCs and the National Housing Bank supervises them. RBI issued the current HFC Directions on 28 November 2025. A note to paragraph 5 says that reporting meant for supervisors goes to NHB as the supervisor of HFCs. Where the Directions mention Sections 45IA, 45IB and 45IC of the RBI Act, an HFC reads Sections 29A, 29B and 29C of the NHB Act. We keep both calendars for you.

An HFC is in the Middle Layer or the Upper Layer, never the Base Layer. Paragraph 9 of the HFC Directions says so, with the exact layer set by RBI’s scale-based parameters. That means a new HFC carries Middle Layer obligations from the start, even with a small loan book. We plan your governance and reporting for that level from day one.

An HFC must keep total capital of at least 15% of its aggregate risk-weighted assets on an ongoing basis, under paragraph 20 of the Directions. Tier 1 capital must not fall below 10% at any point of time. Risk weights depend on the type and size of each loan, so your mix of products affects how much capital you need. We model this with you before the first disbursement.

The company is treated as an NBFC-ICC. Paragraph 17 says an HFC unable to fulfil the principal business criteria shall be treated as an NBFC – Investment and Credit Company and must approach RBI to convert its CoR from HFC to NBFC-ICC. So watch the 60% and 50% ratios every month, not just at year-end. Tracked that way, you can correct the mix long before the balance sheet date.

Deposit-taking is tightly ruled. Paragraph 75 applies the minimum credit rating conditions of RBI’s NBFC Acceptance of Public Deposits Directions to HFCs, and paragraph 79 bars an HFC from holding deposits in excess of twelve times its net owned fund. So deposits come with a rating requirement and a hard ceiling. We check both conditions before deposits enter your funding plan.

There is no fixed date we can promise. The time depends on how complete the file is and how quickly queries are answered. Two items need the most preparation: the source of the ₹20 crore net owned fund and a business plan that meets the 60% and 50% tests. A file that answers those questions upfront moves faster. We front-load that work for you.