Criteria of CRISIL to Rate House Financing Companies

With growth of real estate and infrastructure projects, several home buyers and real estate investors are looking forward to purchase property. However, changing norms of construction, stamp duty, inflation in material cost, etc. have caused the prices of properties to rise steeply. To simplify the purchase of home, several eager home buyers resort to financing options.

Observing the growth of real-estate sector in the past few years, several banks and private financers have come up with versatile financing schemes. Availing housing finance in India from companies such as PNB Housing, DHFL, and HDFC has become convenient, provided you present the necessary documentation and get your credit repayment capacity assessed. For that purpose, CRISIL or Credit Rating Information Services of India provides a credit score after validating your income, existing debts, future responsibilities, and any other liabilities as such.

CRISIL is not just responsible for having the loan sanctioned by the financing company but it is also the regulatory body in deciding the housing finance options. For instance, CRISIL has rated a housing financing company PNBHousing as CRISIL AA+ for Bank Loans with long term rating. Only after assessing the financing options provided by this company, its history, registration details, and a plethora of factors, CRISIL was able to rate the loans conveniently. You can refer to PNBHFL ‘About Us’ page to know more about it. This rating agency has also given a rating of CRISIL GVC Level 1 to HDFC, and similar ratings to Tata Capital, Religare housing finance, etc.

While allocating ratings to these financing companies with an intent to improve their credibility among home loan buyers, CRISIL takes into consideration several factors. Few of these factors are listed below:

Strength of Credit Appraisal and Rating System

This includes assessment of credit underwriting norms that play a key role in the type of financing. Moreover, focus is also laid on the level of control the financing company has over control of assets and expenses to maintain the profitability scale.

Management

Financing company’s current management team and the influence of its members in the market plays a crucial role in judging the quality of financing options offered. A dynamic team that strategizes and implements reforms to maintain profitability qualifies for a higher rating.

Market Position

Company’s current position in the market with respect to its capital value is a deciding factor in assessment of the house financing options offered by it. Better the market position, greater are the chances of availing good ratings.