February 24, 2024

Housing Finance Development

It's Your Housing Finance Development

Ummeed Housing Finance Receives Rs 160 Cr Sanction From US Govt’s DFC

Ummeed Housing Finance Private Limited (UHFPL), a Gurgaon based digital affordable housing finance company (HFC), has received a sanction of up to $20 million (approx. Rs 160 crore) from the U.S. International Development Finance Corporation (DFC). The funding will be used for providing long-tenure housing finance to the Economically Weaker Sections (EWS), Lower-Income Groups (LIGs) and Middle-Income Groups (MIGs) in Tier 2, 3 & 4 cities in the country.

“We are also proud to announce that Ummeed has been recognized as a 2X Challenge eligible enterprise, championing the expansion of housing finance opportunities to women, reinforcing our commitment to gender equality and economic empowerment. The 2X Challenge is a global initiative supporting women’s economic empowerment by mobilizing capital to invest in businesses and projects that benefit women in emerging markets.”

DFC is the US government’s development finance institution that works with the private sector to channel development capital into emerging markets. In this instance, DFC is partnering with UHFPL to fund approximately 2,000 new, low-ticket mortgages, averaging $11,600 (around Rs 9 lakh) in size, with tenures of up to 15 years. 

The project is expected to create a positive impact in Tier 2, 3 & 4 cities of India by improving access to institutionalized credit through affordable housing finance. Ashutosh Sharma, Founder & Managing Director, UHFPL, said, “It is a proud moment for us to be associated with the U.S. International Development Finance Corporation. This DFC facility allows us to extend long dated credit to the underbanked population to assist with home purchases, construction, and extension. Our programme strongly encourages women co-ownership on these loans and properties. Our technology-enabled platform delivers shorter turnaround times on these loans which is an important requirement from our customer segment”.

“This is an important transaction that will provide vital financing to support increased access to affordable housing in India,” said James Polan, Vice President of DFC’s Office of Development Credit. “The project will help India meet its growing demand for affordable housing and grow homeownership among women.”

UHFPL began its journey in 2016 and provides affordable housing finance to the underserved and underbanked population, and now operates through 84 branches in seven states across North and Central India. 

The company has developed a fully digitized loan approval and disbursal system, which allows for a quick turnaround of customer requests. While the company’s primary focus continues to be on the housing loan segment, it also offers secured business loans to the MSME sector. The company offers loans in the range of Rs 3 lakh to Rs 50 lakh for home purchases, home construction, home renovations and repairs, loans against property, and business loans. The company has disbursed loans to over 24,000 customers since its inception.

The company has built a strong foundation with the support of four marquee investors — Norwest Venture Partners, Morgan Stanley Private Equity Asia, Lightrock, and CX Partners. The Rs 1,350-crore plus assets under management (AUM) validate the HFC’s strong operating model and position it well to expand further into newer geographies. The company has successfully built a broad wagon wheel of borrowings by establishing relationships with a diverse mix of more than 25 lenders, including Public & Private Sector Banks, Global Development Financial Institutions and Domestic Financial Institutions.