The Pradhan Mantri Awas Yojana is an initiative by the government to provide affordable housing at subsidised interest rates on home loan to the citizens of India. Launched in 2015, the PMAY also known as the Modi Loan Scheme caters to the need for housing by middle-income groups along with the economically weaker sections and the people from low-income groups.
There are two major sections of the PMAY, these include-
- Pradhan Mantri Awas Yojana (Urban) (PMAY-U) which applies to the urban population
- Pradhan Mantri Awas Yojana (Gramin) (PMAY-G and PMAY-R) which applies to the rural population
Under PMAY-U there are the following three schemes-
- EWS /LIG
- CLSS (MIG-I)
- CLSS (MIG-II).
EWS stands for Economically Weaker Sections while LIG stands for Low Income Group. CLSS stands for Credit Linked Subsidy Scheme, and MIG stands for Middle Income Group.
Basic features of the Pradhan Mantri Awas Yojana (PMAY)
- The PMAY offers a subsidy on interest rate of home loan of 6.5 per cent for a tenure of 20 years
- For differently-abled citizens as well as senior citizens there is a compulsory provision of ground floor housing
- It ensures that all building materials used for construction are eco-friendly
- The scheme coverage extends to include all urban areas in various states of India
- As an initiative to promote women homeowners, both female and male dheads are required to be registered for the property except for in cases when there is no female member in the family
Eligibility Criteria for PMAY
The eligibility parameters are divided on the basis of the three schemes:
EWS/LIG Scheme
- Income not more than Rs.3 lakh per annum for EWS and income less than Rs.6 lakh per annum for LIG
- Timeline for availing the scheme is between 17th June 2015 to 31st March 2022
- EWS beneficiary can have a carpet area of 30 sq. mts. and LIG beneficiary can have a carpet area of 60 sq. mts
- The carpet area accounts for internal floor space inclusive of internal partition walls but excluding external walls
- 20 years is the maximum period for the repayment of the loan at the end of which the applicant should be less than 70 years of age
CLSS (MIG-I) Scheme
- Income should be more than Rs.6 lakh per annum but less than Rs.12 lakh.
- Up to INR 9 Lakh only, a subsidy of 4% is applicable; as a result, if the lender approves a higher loan amount, the additional amount is not linked to the subsidy
- The carpet area must be up to 120 sq. mts, which takes into account the floor space within the home inclusive of internal partition walls but excluding external walls
- Banks can sanction a loan for 30 years, despite the official term being 20 years, if at the end of repayment tenor your age is less than 70 years
- Only 50% of your gross income can be deducted which is inclusive of the home loan EMI
CLSS (MIG-II) Scheme
- Income should be more than Rs.12 lakh per annum but less than Rs.18 lakh
- Up to INR 12 Lakh only, a subsidy of 3% is applicable; as a result, if the lender approves a higher loan amount, the additional amount is not linked to the subsidy
- Banks can sanction a loan for 30 years, despite the official term being 20 years, if at the end of repayment tenor your age is less than 70 years
With the focus of the realty sector on the affluent section of the population, lakhs of residences remain unsold while there exists a shortage of approximately 20 million residential units for the rural as well as the urban poor. To counter this, the PMAY also known as the Modi Loan Scheme aims to offer housing units at very low price points while increasing the subsidised loan amount to cover a large section of the urban poor and incentivise India’s overall real estate sector.
