Launched in the year 2015, Pradhan Mantri Awas Yojana aims to provide a brick and mortar house to every Indian citizen by the year 2022. Split into two major segments, each catering to the urban and rural sectors, this scheme offers easy financing with subsidised interest rates for home loans to Indian households who do not have any house.
Key stats of PMAY
- The initial Rs.6,043 crore granted by the Central Government for PMAY-U, the amount was revised and raised to Rs.6,500 crore for the duration between 2017 and 2019.
- A total of Rs.33,000 crore is allocated to the PMAY-G.
- 37.45 lakh houses have been sanctioned to the urban sector, of which 2.7 lakh houses have been occupied already (as per the previous reports)
Consequently, Indians who do not already have a residence on their own can easily apply for benefits under this scheme. To successfully do so, it is important for both to understand the PM Awas Yojana eligibility as well as the features offered under this scheme.
Eligible earning groups
Being a government initiative looking to cater to the financially weaker sections of the society, the eligibility requirements for this scheme are specific. Eligible individuals can avail subsidised home loans from different financial institutions. Divided into 4 segments based on household earning, different subsidised rates are offered under PM Awas Yojana. The 4 basic segments of earning groups are as follows.
- Middle-income Group Category II (MIG II): Household earning should not exceed beyond Rs.18 lakh.
- Middle Income Group Category I (MIG I): Maximum income of a family can be up to Rs.12 lakh.
- Low Income Group (LIG): Total family income under Rs.6 lakh.
- Economically Weaker Section (EWS): Household earning under Rs.3 lakh.
While individuals categorised as per these groups can opt for higher loan amounts, the key benefit of Pradhan Mantri Awas Yojana is the different subsidies offered to these earning groups. This limit is the same for EWS and LIG, while MIG I and MIG II have separate subsidy slabs under this housing for all initiative. Before moving on to the specific subsidy rates, it is important to first understand the common eligibility criteria.
Eligibility criteria for PMAY
Potential borrowers who plan to apply for PMAY should know the eligibility criteria which are common for all earning groups.
- Applicant or anyone from the immediate family should not own any house.
- Even married couples opting for joint ownership can avail this subsidy only once.
- Major criteria of Pradhan Mantri Awas Yojana eligibility include that no one from the applicant’s immediate family has already availed the scheme.
In terms of benefits, the following subsidy slabs based on loan amounts have been allocated under PMAY.
- Rs.3 lakh: Among different earning groups who can apply for PMAY, knowing the eligibility criteria for specific loan amounts is vital. EWS individuals can avail subsidies up to 6.5% on loan sums going up to Rs.3 lakh if they are one of the beneficiaries.
- Rs.6 lakh: This loan amount is applicable to LIG applicants. The subsidy rate for this slab is also at 6.5%.
- Rs.12 lakh: Applicable for MIG I individuals, the loan amount eligible for subsidy can be up to Rs.12 lakh. The subsidy offered on the home loan interest rate is 4%.
- Rs.18 lakh: Subsidy up to Rs.18 lakh is offered to MIG II applicants with a subsidy of 3% on the interest rate.
Applicants must register themselves on the official website of PMAY. A calculator for PMAY can be used to check eligibility while also selecting a financial institution for the loan. The application procedure is usually quite simple.
PMAY benefits are applicable as per income strata and primarily in the form of subsidised interest rates on a home loan. Specific individuals who have been deemed eligible for PMAY can avail such a subsidised loan under the scheme.