IIFL Home Finance has raised a $50 million loan from US International Development Finance Corp (DFC) to grow its affordable housing finance portfolio with a special focus on sustainable housing. The deal marks the growing confidence shown by overseas investors on India's affordable housing space, which is growing rapidly with government focus. The mortgage lender is raising debt for the second time this year. In January, it had raised $68 million from Asian Development Bank.

The fund was raised at a concessional 5.72% rate, which includes the hedging cost. Its average cost of funds is 8.4%.

The mortgage lender, which is a subsidiary of IIFL Finance, caters mostly to the economically weaker sections and lower income groups. At the end of June, it had assets under management of Rs 29,595 crore.

Home loans contribute more than three-fourths of this. Loans against property to small enterprises and construction finance are its other lending verticals.

Parent IIFL Finance had raised $175 million last month in a three-year external commercial borrowing from lenders including HSBC and overseas branches of Bank of Baroda (Gift City) and Union Bank of India (Sydney branch), at a blended cost of 9.2%.