HMDA or GHMC Mortgage Flat in Hyderabad: Can You Buy It and Get a Home Loan?

By Vijay Arjun V (B.Pharm, PGDM), authorised LIC HFL DSA since 2002 and DME (Direct Marketing Executive) appointed by LIC HFL. Facts checked on 29 October 2026.

What is an HMDA or GHMC mortgage on a flat?

When GHMC, HMDA or a municipality sanctions an apartment building in Hyderabad, the builder has to mortgage a part of the built-up area to that authority. It is security that the building will be completed as per the sanctioned plan. The mortgaged portion is usually a set of specific flats or a floor, named in the building permit, and the mortgage is registered, so it shows on the encumbrance certificate.

The mortgage is released only at the end. HMDA’s occupancy certificate procedure says that after approval the Director issues the occupancy certificate and “10% mortgaged area will be relinquished”. Building permits carry a matching condition: “The mortgaged built-up area shall be allowed for registration only after an Occupancy Certificate is produced.”

Open-plot layouts work the same way. HMDA’s FAQs say a developer may sell 75% of the plotted area after layout approval, after mortgaging 25% of the plotted area as surety for completing the layout’s roads, drains and other works.

Is this the same as a bank mortgage?

No. Your home loan mortgage is between you and your lender. The HMDA or GHMC mortgage is between the builder and the planning authority, and it sits on the builder’s unsold flats or plots. It has nothing to do with the builder’s own project loan either.

What it means for a buyer

Can you buy a flat that is under HMDA or GHMC mortgage?

You can agree to buy it, but you cannot own it on paper until the mortgage is released, because the sub-registrar will not register the sale before the occupancy certificate. Until then, any money you pay rests on the builder’s promise. If the building deviates from its plan, the occupancy certificate and the release can be delayed, and your flat stays stuck with them.

So a mortgaged flat is a reasonable buy only when the building is complete, the occupancy certificate has been issued and the release is on record. Before that, keep any payment small. Under the RERA Act, a builder cannot take more than 10% of the price without a registered agreement for sale.

When is it safe to buy, and can you get a home loan?

Buy, and apply for the loan, when three papers are in hand:

1. Occupancy certificate for the building; see is an OC mandatory for a home loan.
2. Release or relinquishment order from GHMC, HMDA or the municipality for the mortgaged flats.
3. An encumbrance certificate showing the mortgage to the authority and its release; see how to get an EC online in Telangana.

With these, the flat is a ready-to-move flat like any other. A lender needs to register its own mortgage on a flat that is legally in your name, so LIC HFL and other lenders fund a released flat, not one still mortgaged to the authority. A completed flat with an OC also carries no GST, and the loan is released in one go; see under-construction vs ready-to-move.

How to find out which flats are mortgaged

• Ask for the building permit and sanctioned plan. They name the mortgaged flats or floor.
• Check the encumbrance certificate for the builder’s land and building. A mortgage to GHMC or HMDA shows as an entry, and so does its release.
• Check the project on Telangana RERA. Registered projects upload approvals and quarterly progress; see how to check a project on Telangana RERA.
• Get it in writing. If the builder says your flat is not in the mortgaged portion, ask for the flat numbers that are, in writing.
• Send the papers to us before you pay an advance. We check them against what LIC HFL will ask for.

Mortgaged plots in HMDA layouts

The same rule applies to plots: the plots mortgaged to HMDA are released only after the developer completes the layout works. Buy a mortgaged plot only after HMDA’s release order, and check that the layout itself is approved; see HMDA and DTCP plot loan rules and the LIC HFL plot loan.

Frequently asked questions

What is an HMDA mortgage flat?

A flat in the 10% of a building’s built-up area that the builder mortgages to HMDA (or GHMC or a municipality) as a guarantee of building as per plan. It is released after the occupancy certificate.

Can I register an HMDA mortgage flat before the OC?

No. Building permits allow the mortgaged built-up area to be registered only after the occupancy certificate is produced.

Will a bank give a home loan for a flat under GHMC mortgage?

Not while it is mortgaged, because the flat cannot be registered in your name. Once the OC is issued and the mortgage released, it is funded like any ready flat.

What happens if the building has deviations?

The occupancy certificate can be delayed until they are settled. HMDA’s procedure allows compounding of deviations only up to 10% of the sanctioned plan. Larger deviations can hold up the release of the mortgaged flats; see home loans on properties with deviations.

Is buying a mortgaged flat cheaper?

Sometimes the price is lower, but you carry the risk of the whole building’s approvals. Compare it with a released flat in the same project.

More: LIC HFL home loans in Hyderabad · flat possession checklist.

Sources: HMDA, procedure for occupancy certificate (hmda.gov.in); HMDA FAQs on layouts (hmda.gov.in); conditions of a GHMC building permit published with a Telangana RERA project registration; Real Estate (Regulation and Development) Act, 2016, Section 13.

Hyderabad Home Loans is run by Elite Financial Services, an authorised Direct Selling Agent (DSA) of LIC Housing Finance Ltd. We are not LIC HFL. Loans are sanctioned solely at LIC HFL’s discretion; rates and fees may change.