Most of us dream of owning a home. However, most financiers offer home loans at higher interest rates, which becomes a major impediment for most aspiring homeowners. For individuals looking to take their dream of owning a home towards fruition, it is important to choose the right lender and reap the benefit of Pradhan Mantri Awas Yojana (PMAY).
Curated to achieve the mission - ‘Housing for all by 2022’, this scheme was announced by the Indian government with a special aim to boost the affordability of houses for the urban poor. Itencompasses the Credit Linked Subsidy Scheme (CLSS), which provides an interest subsidy on home loans for the purchase, construction, extension, or improvement of houses.
Features of PMAY Scheme:
The Pradhan Mantri Awas Yojana (PMAY) offers an interest subsidy on housing loans for the construction or acquisition of homes. Some of the features of thisscheme have been listed below:
- The government plans to construct 2 crore homes under this scheme with a special focus on rehabilitating the residents of slum areas into‘pucca’ or concrete homes
- The scheme aims to help the customers belonging to the Economically Weaker Sections (EWS), Low-income Groups (LIG), or Middle-income Groups (MIG) in building or acquiring permanent homes for themselves
- The CLSS provides subsidies on home loan interest rates to those eligible for this scheme. The table below shows the PMAY Scheme subsidy details based on different customer income groups:
| Income Group | Household Income (annually) | Interest Subsidy (%) | Subsidy calculated on a max loan of | Max Subsidy |
| EWS and LIG | Up to ₹6 lakh | 6.50% | ₹6 lakh | ₹2.67 lakh |
| MIG I | ₹6 lakh – ₹12 lakh | 4% | ₹9 lakh | ₹2.35 lakh |
| MIG II | ₹12 lakh – ₹18 lakh | 3% | ₹12 lakh | ₹2.30 lakh |
Who is eligible to apply for PMAY?
The following individuals can apply for the PMAY scheme:
People belonging to the
- Economically Weaker Section (EWS)
- Low Income Group (LIG)
- Middle Income Group-I (MIG I)
- Middle Income Group-II (MIG II)
- Schedule Caste (SC)
- Schedule Tribe (ST)
- Other Backward Class (OBC)
However, it is important to note that the beneficiary family of this scheme must comprise husband, wife, unmarried sons and/or unmarried daughters. Any adult earning member of the family, irrespective of marital status, should be treated as a separate household.
Benefits of PMAY Scheme:
Apart from ensuring subsidised home loans for people belonging to the lower and mid-income category, below are the benefits of the PMAY scheme:
1. Rise in the standard of living of the citizens
Having a permanent house to live in, provides financial and social security, comfort, and quality of life to an individual. As the scheme enables all sections of the society to afford home loans, the economically weaker sections can raise their standards of living, with the help of this scheme.
2. Successfully leveraging land that’s losing value
The scheme lays special attention on encouraging the slum area dwellers to move to ‘pucca’ houses for a secured future. With the successful implementation of the same, the lost value of the lands adjoining the slum settlements can be regained.
3. Financial security for women
As the scheme encourages women to apply for home loans, women have a good chance to secure their financial future by being the homeowners. Moreover, it is mandatory for an adult female in a family to co-own the property. This condition, however, is not mandatory in cases of home construction on an existing plot or for extension/renovation of existing kuccha or semi-pucca homes.
4. Eco-friendly benefits
The homes constructed under this scheme are built using eco-friendly construction materials and technology. Besides building these homes with sustainable and good quality material, the developers and the builders have been instructed to ensure minimum damage to the environment around the construction sites.
5. Increase in job opportunities
As the scheme underlines a huge construction and re-development project with respect to the construction, extension, and improvement of homes, it will create ample job opportunities in the real estate sector.
PMAY is quite a promising initiative by the government for the upliftment of the economically weaker sections of the society. By fulfilling the fundamental need of having a permanent house to live in, the government is encouraging the masses to live a secure, hygienic, and stable life.
Grihum Housing Finance offers affordable home loans under PMAY scheme to turn your dream of owning a house into reality.
