What is down-payment plan (DPP)?
Also called: DPP, down payment scheme, upfront payment plan, full payment plan
Under a down-payment plan you pay most of the price, usually 90% to 95%, within 30 to 60 days of booking, in return for a discount of roughly 5% to 12% on the basic price. The balance is paid at possession.
The logic is the builder's. Cash upfront is cheaper than borrowing, so developers pass part of the saving to the buyer. In the NCR boom years before 2013, DPP discounts of 10% to 15% were routine, and thousands who took them in Jaypee Wish Town, Amrapali and Unitech projects then waited a decade or more for their homes. That is the whole risk of the plan in one line: once you have paid 95%, the builder has little financial reason to hurry.
RERA has made the plan harder to misuse. Section 13 caps what a promoter can take before a registered agreement for sale at 10%, so a DPP now means registering the agreement, and paying stamp duty, within that first month. Section 4(2)(l)(D) requires 70% of buyers' money to go into a separate account for that project's land and construction costs, withdrawn only against certificates from an engineer, an architect and a chartered accountant.
DPP makes sense in narrow circumstances: a project close to completion with the structure up, a builder with a clean delivery record, and a discount that comfortably beats what your money would earn elsewhere. Do the arithmetic. A 7% discount on ₹1 crore is ₹7 lakh. If paying upfront means roughly ₹90 lakh goes in about a year earlier, on average, than a CLP would demand it, and you're borrowing at 8%, the extra interest is around ₹7 lakh and the discount is gone. On a fresh launch with possession four years away, the same discount rarely pays for the risk.
Get the discount written into the agreement as a lower BSP, not as a 'cashback' promised at possession.
A buyer in a nearly finished Gurugram project is offered 8% off a ₹1.5 crore BSP for paying 95% within 45 days. The saving is ₹12 lakh, with possession expected in 14 months and the OC application already filed.
Taking a DPP on a new launch from a developer with a history of delays. You carry the full construction risk and are left with almost nothing to withhold.
Questions people ask about down-payment plan (DPP)
How much discount do builders give on a down-payment plan?
Commonly 5% to 12% of the basic price, higher in slow markets. Compare it with the interest cost of paying early before deciding.
Can I get a home loan for a down-payment plan?
Banks are cautious, because they prefer to disburse against construction stages. Some will fund a DPP only in projects they have approved and close to completion.