The Pradhan Mantri Awas Yojana or the “Housing for All” initiative by the Central Government of India is a scheme of subsidies initially launched as a means to offer affordable housing to individuals in the low-income bracket.
At present, the medium income group can also derive its benefits as it is currently offering a home loan subsidy towards the construction of low-cost houses in both rural and urban areas.
It was the principal goal of the Government of India to subsidise the building of 2.95 Crore rural houses and 1.2 urban houses by the year 2022.
It is important for individuals to know why it is beneficial to opt for a home loan under the Pradhan Mantri Awas Yojana (Urban) or PMAY (U) scheme to benefit from the scheme. They should also consider the eligibility criteria to avail such loans.
Eligibility For Middle-Income Groups
A new Middle Income Group (MIG) has been introduced to PMAY, and it bears two slabs, MIG I and MIG II.
The slab constitutes one category having a household income ranging from Rs. 6 Lakh up to Rs. 12 Lakh. The other group comprises the ones with an annual income ranging from Rs. 12 Lakh up to Rs. 18 Lakh.
This implies that any individual coming within the salary bracket of Rs. 6 Lakh – Rs. 18 Lakh per annum is eligible to avail the benefits of the home loan subsidy provided they also meet all other conditions.
As the scheme primarily aims to offer housing for everyone, individuals who already own a home are not eligible for the scheme. The same ineligibility applies to the family members of that individual.
Further, there are specific regulations that stand valid in marking one’s eligibility to this scheme. Here is an overview of the different categories of individuals eligible to avail PMAY advantages.
The beneficiary family must not have a pucca (all weather dwelling unit) house in its name. A beneficiary family is inclusive of husband, wife, unmarried son(s) and daughter(s). Submission of Aadhaar numbers of all family members is mandatory to avoid duplication.
Adult Earning Member
There are certain exceptions to these regulations as well, as the guideline also mentions that an adult earning member married or unmarried can have an isolated household provided he/she doesn’t own a pucca residence anywhere in India. In this case, PMAY benefits can be availed.
Earning Unmarried Children Living With Parents
If unmarried children are staying in a home owned by parents along with them, and are earning and don’t have any pucca home in their name, then they can also opt for PMAY scheme.
If a married couple lives in a rented home, they can opt for PMAY scheme even if their parents own any other home. They will constitute a separate household and will be eligible for a single house along with PMAY benefits provided it is purchased by any one of the spouses or by both of them jointly.
Eligibility In Terms Of Home Area
There is a criterion related to carpet area (area enclosed within the walls) of the house under the PMAY scheme. A residential house to be eligible for the subsidy under the Credit-Linked Subsidy Scheme for the MIG owners under PMAY (U) can have an area of up to 160 sq. mt. for MIG I and up to 200 sq. mt. for MIG II applicants.
Exploring PMAY Loan Options
There are a number of ways an individual can acquire a new home. They can purchase it from the secondary market through re-purchase, or directly avail a new house from a developer or builder, or construct a house on their own. They can opt for a PMAY loan with attractive home loan interest rates along with subsidies across all the mentioned instances.
The construction of rooms, kitchen, toilet and other extensions to the existing pucca unit also fall under the PMAY scheme and its financial benefits.
How To Avail Subsidised Loans?
One can avail a home loan linked with PMAY from recognised primary lending institutions. These include scheduled commercial banks, regional rural banks, urban cooperative banks, state cooperative banks, small finance banks, and of course the Non-Banking Financial Companies (NBFCs).
There is no need to pay any processing charge for the housing loan if applicant is in accordance to the income criteria. However, if a new loan is availed above eligible loan amounts, then the lender can charge standard processing fees.You can avail your Home Loan quicker with NBFCs and benefit from the subsidised interest rates as per PMAY.
Few NBFCs can also help you with their offers on personal loans, home loans, business loans and chosen set of other financial products. This makes the process of availing financing easier. At the same time, it helps you save on time.
The PMAY subsidises housing loan interest rates in an attempt to provide affordable housing to the economically weaker sections of the population. The interest subsidy benefit applies upfront on the principal outstanding. It is an outstanding effort which can increase the average living standards of India multifold.
Prafulla Mishra is an experienced real estate & financial advisor who is well known for his ability to foretell the market trends as well as for his real estate astuteness. Prafulla has also amassed a great name for himself as a blogger.