Affordable Housing Finance Growth to Slow in FY26: Crisil Report

• Affordable housing finance firms' AUM growth is projected to moderate to 21% in FY26 from 23% in FY25, and remain flat at 20-21% in FY27.
• The loan against property (LAP) segment growth is expected to slow to 24-26% in FY26 from 30% due to recalibrated underwriting and asset quality pressures.
• Profitability for these firms is anticipated to be slightly lower but will remain healthy in FY26 and FY27.
• Small-ticket LAPs (sub-Rs 15 lakh) saw a significant increase in 90-day overdue assets for over 70% of affordable HFCs between FY24 and FY25, continuing into H1 FY26.
• Affordable HFCs benefit from lower bank competition, urbanization, and government support, but traditional HFCs may pivot to this segment.

Why It Matters: Affordable housing finance firms face moderating AUM growth and asset quality concerns, despite healthy profitability.