Things to know about PMAY subsidy scheme


Things to know about PMAY subsidy scheme

As per official reports, in 2020, more than 2 lakh Indians were still homeless in urban areas. Similarly, the number of individuals who own an inhabit

How to avail housing loan subsidy under Pradhan Mantri Awas Yojana?
MythBusters! Busting The Biggest Myths about Self-Managed Super Funds
Things To Keep In Mind Before Investing In Us Stock Markets

As per official reports, in 2020, more than 2 lakh Indians were still homeless in urban areas. Similarly, the number of individuals who own an inhabitable home is also meagre. To address this grave situation and ensure shelter for every Indian, the government launched Pradhan Mantri Awas Yojana or PMAY scheme in 2015. Till date, it has benefitted many, as the following statistics reveal:

  • The number of sanctioned houses till 2021 is 112.4 lakh, of which 48.31 lakh houses are completed under PMAY Urban. 
  • Under PMAY Gramin, almost 19.55 million houses are sanctioned, and 14.16 million are completed till April 2021. 

The government also has plans to provide 1.12 crore houses to beneficiaries by 2022. Therefore, if you are an aspiring homeowner in India and want to avail PMAY benefits, you should know about this scheme in detail. 

Points to know about PM Awas Yojana

Although this government initiative promotes ‘Housing for All’, it comprises several components that applicants must know about. This scheme covers all statutory cities, villages, including UTs. 

Components of PMAY

PMAY can be divided into 4 major components as follows: 

  • Affordable housing 

Individuals from the Economically Weaker Section are eligible to avail central assistance of up to Rs.1.5 lakh to construct a home. The government has also partnered with public and private sector enterprises to streamline the process. 

  • Beneficiary-led individual home constructions 

Here also, the central government sanctions up to Rs.1.5 lakh for individuals belonging to EWS. Eco-friendly materials are used to construct these houses. 

  • Credit linked subsidy scheme 

With this provision, PMAY beneficiaries can avail home loans at subsidised interest rates. Almost all leading financial institutions provide a home loan under the PMAY scheme. However, the interest rate cap and loan amount differ with household income of the beneficiaries. 

  • ‘In-situ’ slum development 

Eligible slum dwellers can avail up to Rs.1 lakh per house with proper documentation. It encourages them to leverage the land of slum settlements and build a concrete or pucca house. 

However, to enjoy any of these provisions, individuals need to meet certain PMAY eligibility criteria. 

Eligibility for PMAY scheme 

The eligibility for PMAY scheme depends on the annual household income of the beneficiaries. It is divided into: 

  • The EWS and low-income group should not exceed the annual income of Rs.3 lakh and Rs.6 lakh, respectively. 
  • The Middle Income Group I should have an annual income from Rs.6 lakh to Rs.12 lakh. 
  • The Middle Income Group II beneficiaries should have an annual income between Rs.12 lakh and Rs.18 lakh.
  • Besides, the applicants or their families should not own any property anywhere in India. 
  • The applicant must not have availed any home subsidy scheme from state or central government before.
  • For ESW and low-income groups, the woman head of the family should own or co-own the property to be registered. 

Only after meeting the eligibility criteria above individuals can reap the benefits of this scheme or apply for a home loan under PMAY. Additionally, the names of beneficiaries should be on state PMAY list to qualify for any scheme mentioned above.  

Benefits of PMAY scheme 

Following are the most noted benefits of opting for a PMAY scheme:

  • Subsidised interest rates

Under PMAY scheme, eligible individuals can avail subsidised interest rates on a home loan. For instance, 

  • Both EWS and low-income group earners can avail interest rates of 6.5% on the loan principal of up to Rs.6 lakh.
  • MIG I group qualifies for a home loan interest rate of 4% on a loan amount of up to Rs.9 lakh.
  • MIG II group can avail interest rates of 3% on loan corpus of up to Rs.12 lakh. 

However, individuals can also use a PMAY eligibility calculator to estimate how much they are likely to save with subsidised interest rates.

Those failing to qualify for this scheme can alternatively avail a home loan at competitive interest rates from any leading financial institution in India. 

Few such lenders also extend pre-approved offers that expedite loan processing. These offers are applicable on various financial products, including home loans, loans against property, etc. Check your pre-approved offer online by entering your name and contact number. 

  • Additional benefits for women, senior citizens and differently-abled

As per PMAY guidelines, the women head of a household must co-own the home and apply jointly for a home loan. It helps secure the future of older women and widowers. 

Similarly, elderly and differently-abled beneficiaries are also allotted the ground floor for better accessibility. 

  • Usage of eco-friendly material 

Builders and contractors primarily use eco-friendly materials in building houses under PMAY scheme. Besides, the houses follow construction norms set by National Disaster Management Authority and National Building Code to ensure safety, especially in flood-prone or earthquake-prone areas. 

  • Slum rehabilitation 

This PMAY scheme also stresses eradicating slum settlement and converting it into a concrete urban settlement with the proper use of available land. 

These are the primary features and benefits of PMAY scheme that individuals need to know about before applying.