Deferred payment plans, a boon for home buyers and developers

The deferred payment plans offered by developers in financially stressed Covid times, are beneficial for both home buyers and developers. 

Under these deferred payment plans, the home buyers need to pay just 5% of the property price for affordable housing. There are other such plans where the upfront payment varies from 10% to 20% and in some cases even 30%. the balance amount is to be paid at the time of possession of the house. These schemes are different from banned subvention schemes. Under those schemes, the home buyer would pay the builder, entire cost of property while the builder would take care of home loan interest.

Buyers are currently risk averse to under construction homes. These deferred payment schemes are devised to reduce risk of home buyers. Although in Affordable Housing it is not possible as the payment plans are fixed under the policy but in other housing projects especially in luxury homes it helps. It provides double benefit, they can save both on rent and home loan interest cost. Developers on the other hand, are able to reduce their under construction inventory and check cost over runs.