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How Pradhan Mantri Awas Yojana works

Pradhan Mantri Awas Yojana (PMAY) is a Government of India initiative that envisions providing affordable housing to the urban poor. It’s a credit-linked subsidy scheme (CLSS), which means that the scheme beneficiaries are eligible for interest subsidy if they opt for a loan under this scheme. Read on to know the various aspects of this scheme, including eligibility criteria, features, and benefits, among others.

PMAY Eligibility Criteria: One of the frequently asked questions about PMAY is its eligibility criteria. Note that the scheme is available for individuals who belong to the economically weaker section (EWS), lower-income group (LIG), and middle-income group (MIG). The table given below defines the annual income range based on which the groups are classified:

Section Annual Income Range
EWS Up to 3 Lakhs
LIG Between 3-6 Lakhs
MIG I Between 6-12 Lakhs
MIG II Between 12-18 Lakhs

Also, note that:

  • You can apply for a PMAY subsidy only if you don’t possess any pucca property
  • You have not availed any central assistance for any housing scheme either from the state or central government
  • The house for purchase must belong to any one of the towns, villages, or cities, according to Census 2011
  • The property must be co-owned by a family’s female member

Documents Required to Apply for PMAY Subsidy: Documentation depends on whether you are a salaried individual or self-employed. If you are a salaried person, you need the following documents:

  • Application form
  • Proof of Identity
  • Proof of Address
  • Proof of Income

Self-employed individuals also need to provide almost the same documents as of salaried individuals. Also, they need to provide address proof of their business along with income proof which could include ITR documents for the past two years along with profit and loss statement and balance sheet.

PMAY Home Loan Interest Subsidy: The table given below captures the PMAY home loan subsidy on interest along with the maximum loan for subsidy across different categories:

Category Interest Subsidy PA Max Loan Amount for Subsidy
EWS 6.50% Rs.6 Lakhs
LIG 6.50% 6 Lakhs
MIG I 4.00% 9 Lakhs
MIG II 3.00% 12 Lakhs

Online PMAY subsidy calculators are available, which will help you compute the subsidy amount. Note that the interest subsidy works out for a loan period of 20 years.

Understanding Working Methodology of PMAY: Suppose you belong to the MIG II category and wish to purchase a house amounting to 60 Lakhs. After you make the mandatory down payment of 20%, which amounts to 12 Lakhs, you procure a loan of 48 Lakhs. Under the PMAY scheme, you are eligible to receive a subsidy of 3% on 12 Lakhs, and hence interest rate will be applicable on the remaining 36 Lakhs.

How to Get PMAY Subsidy?

  • Apply for a home loan from any of the approved lending institutions.
  • The institution will review your application and forward it to the central nodal agency
  • If the central nodal agency finds no discrepancies in your application, it will disburse the subsidy amount to the lending institution
  • The lending institution will credit it into your account, which will bring down the total loan amount

Now that you know the PMAY features and benefits and wish to apply for a home loan under the scheme, it is the right time. Find out about financial institutions covered under the scheme, and fulfill the dream of owning your home today.

Grihum Housing Finance is one of the approved institutions covered under the PMAY scheme. If you wish to avail PMAY home loan subsidy, approach us today by filling up this application form, and we will do the needful on your behalf.

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