LICHFL hopes reverse mortgage scheme to be beyond 20 yrs

MUMBAI: With the new UPA Government expected to give a push to economic reforms, LIC Housing Finance Ltd (LICHFL) hopes the Centre would resolve some pending issues to enable it to launch long-awaited reverse mortgage scheme for senior citizens.

"The new Government will bring in a lot of reforms across sectors. We expect the National Housing Bank will tie-up with insurance companies to continue the reverse mortgage scheme beyond 20 years," LICHFL Director and Chief Executive R R Nair said here.

Reverse mortgage is a financial product that enables senior citizens, who own a house, to mortgage their property with a lender and convert a part of the home equity into tax-free income without having to sell the house.

The taxation issue has already been resolved with the then Finance Minister P Chidambaram declaring that the reverse mortgage would not amount to transfer and stream of revenue received by senior citizens would not be treated as income, he said.

But the pending issue is that the scheme has to be made life-long and not just for 20 years as is the case at present, Nair said.