Affordable Housing Finance Companies (AHFCs) gaining attention

AHFCs are attracting interest from investment analysts due to the potential government allocation of 60,000 crore rupees for subsidized loans for affordable urban housing. While larger banks and housing finance companies cater to the middle and upper-income segments, AHFCs specialize in serving the low-income group (LIG) and economically weaker sections (EWS) who often face limited financing options. AHFCs have experienced faster growth than the overall housing finance industry and have been highlighted by big brokers such as Jeffries, Morgan Stanley, and Centrum. The demand for affordable housing, low mortgage penetration, improved affordability, and government support through housing for all projects contribute to the positive outlook on AHFCs. Their focus on small ticket-size home loans and ability to charge higher rates without intense competition from banks add to their attractiveness.