Pradhan Mantri Awas Yojana

The Pradhan Mantri Awas Yojana is a government-backed housing scheme that aims to provide affordable housing to the urban and rural poor community of India. Launched in June 2015, the PMAY scheme aims to provide interest subsidy for real estate purchase through home loans. The interest subsidy available to beneficiaries depends on their economic category, and is limited by a maximum cap. Known as the CLSS subsidy, it is also available only up to the maximum loan value set for each category.

Beneficiaries can be identified under four economic categories, i.e., MIG-I, MIG-II, LIG, and EWS for interest subsidy benefit transfer. Meet the minimum eligibility requirements to apply for benefits under the scheme with a registered PLI under CLSS.

Bajaj Housing Finance Limited is registered as a Primary Lending Institution (PLI) with the Central Nodal Agency (CNA) under the Credit Linked Subsidy Scheme.

The Government of India launched the ‘Housing for All’ mission in 2015, with the aim to help 20 million Indians own a home by 2021. Under this mission, popularly called Pradhan Mantri Awas Yojana, you can get an interest subsidy on your home loan, based on your household income category and other norms.

The PMAY beneficiary list comprises families including husband, wife and unmarried children. For the purpose of beneficiary selection, every adult member of a family with an income can be considered a separate household entity irrespective of his/her marital status. Once the application has been made under the scheme, applicants can check their name in the Pradhan Mantri Awas Yojana beneficiary list as per their qualification under the urban or rural scheme and applicable category.

There are 4 categories defined under this scheme. These are: 

1. Economically Weaker Section (EWS)

If you belong to this section, you can get interest subsidy on home loans for:

• Acquisition of a new house
• Construction of a new house
• Construction/extension of rooms, kitchen, toilet, etc.

2. Lower Income Group (LIG)

If you belong to this section, you can get interest subsidy on home loans for:

• Acquisition of a new house
• Construction of a new house
• Construction/extension of rooms, kitchen, toilet, etc. 

3. Middle Income Group I (MIG I)

Families belonging to the MIG I category and get interest subsidy for the following purposes.

• Purchase of a new house
• Construction of house
• Extension of existing house

The Pradhan Mantri Awas scheme subsidy benefits under this category are available for households with annual income between Rs.6 lakh and Rs.12 lakh. With the maximum interest rate subsidy of up to 4%, beneficiaries can claim an interest subsidy capped at Rs.9 lakh with home loan tenure not exceeding 20 years.

4. Middle Income Group II (MIG II)

Under this category, PMAY subsidy is available for the following purposes.

• New house purchase or construction
• Extension to existing house

To avail subsidy under this category, the annual income of beneficiaries must be in the range of Rs.12 lakh and Rs.18 lakh, with the tenor for PMAY home loan limited to 20 years. Interest rate on the advance for this category can be subsidised by not more than 3% with maximum subsidy value capped at Rs.12 lakh.

Here are the key parameters* for availing an interest subsidy on your home loan under PMAY, and information on how much subsidy you can avail:

The Pradhan Mantri Awas Yojana aims to make house purchase affordable for Indians by providing interest subsidy under the Credit Linked Subsidy Scheme alongside other forms of assistance. It operates through its two branches, PMAY Urban and Rural, to reach out to as many individuals as possible who are looking to own a home for the first time.

Benefits under the scheme are extended by identifying households based on their annual income, house ownership status and similar other parameters that deem them suitable for application. Combined with initiatives like environment-friendly house construction and affordable costs, the scheme has attained remarkable success in fulfilling its mission of ‘Housing for All’ by the year 2022.

Benefits under the Pradhan Mantri Yojana are extended to applicants successfully qualifying as beneficiaries and securing their places in the yearly beneficiary list released under this scheme. Applicants must also identify their suitable category before proceeding to apply for a home loan under the scheme for affordable house purchase and convenient repayment.

To better understand what is Pradhan Mantri Awas Yojana and the limitations as well as benefits, it is essential to delve into the enlistments under its Rural and Urban branches.

1. Pradhan Mantri Awas Yojana Urban (PMAY-U)

The Pradhan Mantri Awas Yojana Urban extends interest subsidy benefits in approximately 4,330 locations in the country in coordination with various local development authorities of the selected cities and towns. PMAY-U also aims to cover many more cities and towns in India by the end of March 2022, as aimed under its affordable housing mission.

As per the Ministry of Housing and Urban Affairs, as many as 26.08 lakh homes were completed until July 2019 with the help of interest subsidy. Corresponding to this data, funds up to Rs.51 crore have already been released towards the completion of house purchase or construction at subsidised home loan rates. Applicants eligible for benefits under the scheme can easily apply for subsidy benefits via the Pradhan Mantri Awas Yojana online portal.

2. Pradhan Mantri Awas Yojana Gramin (PMAY-G)

Targeting affordable housing facilities in the underprivileged regions of the country, the Pradhan Mantri Awas Yojana Gramin aims to provide financial assistance to homeless and kutcha house residents to purchase or construct pucca houses. Benefits under the scheme are available to all rural regions of the country excluding those of Chandigarh and Delhi. Residents of rural areas confined to plains and other regions can avail financing for such house purchase or construction with differential limits under PMAYG. Following is a list indicating essential details related to this scheme.

The Pradhan Mantri Awas Yojana comprises four primary components through which benefits are passed on to selected candidates. They include Credit Linked Subsidy Scheme, Affordable Housing in Partnership, ‘In-Situ’ Slum Redevelopment, and Beneficiary-Led House Construction/Enhancement. Based on the different components, benefits can either be monetary or material assistance-based. For instance, while the CLSS benefits are monetary, ‘In-Situ’ Slum Redevelopment uses land as a resource to provide suitable housing to eligible candidates.

Credit Linked Subsidy Scheme

The Credit Linked Subsidy Scheme extends interest rate subsidy to selected beneficiaries on home loans availed under the PM Awas Yojana. These benefits differ based on the beneficiary category as per the indicated criteria for qualification. Below given is an elaboration on the beneficiary category along with the eligibility requirements and subsidy benefits available under the PMAY CLSS scheme.

• MIG II: For beneficiary category MIG II, subsidy benefits are available for home loans ranging between Rs.12 lakh and Rs.18 lakh. The maximum interest rate subsidy is 3% and subsidy amount capped at Rs.2,30,156. The carpet area limitation for houses purchased or constructed at 200 sq. m. also defines this category.
• MIG I: Home loan range available for subsidy benefit of 4% under the MIG I category is Rs.6 lakh to Rs.12 lakh. Also, the maximum subsidy amount extends up to Rs.2,35,068 with a carpet area applicability of 160 sq. m. under the CLSS scheme.
• LIG: For LIG category, the interest rate subsidy extends to 6.5% with subsidy amount available up to Rs.2,67,280. The home amount under this category ranges between Rs.3 lakh and Rs.6 lakh, whereby the carpet area limitation stands at 60 sq. m.
• EWS: CLSS also enables home loans within Rs.3 lakh to qualify for an interest rate subsidy of 6.5% with the subsidy amount limited to Rs.2,67,280. The maximum carpet area for this category extends up to 30 sq. m.

Subsidy benefits under the Credit Linked Subsidy Scheme are also limited to home loan tenors extending not more than 20 years.

Pradhan Mantri Awas Yojana for Home Loan

Beneficiaries can conveniently avail a Pradhan Mantri Awas Yojana Home Loan from their selected PLI or Primary Lending Institution registered with a Central Nodal Agency to avail subsidy benefits under CLSS. Available for first-time home owners, the Pradhan Mantri Awas Yojana for home loans ensures affordable housing through subsidised interest rates on sanctioned loans.

A borrower thus needs to pay interest on such a home loan at a much lower cost than other home loan borrowers. Such financing facility also reduces EMIs payable, thus ensuring economic and convenient repayment of a PMAY home loan.

Bajaj Housing Finance Limited is a registered PLI providing Pradhan Mantri Awas Yojana Home Loans at subsidised rates. Such interest rate subsidy is available up to 6.93% for eligible borrowers with subsidy benefits amounting up to Rs.2.67 lakh. Borrowers are eligible for these subsidised home loans even if their parents are existing homeowners. You can easily calculate PMAY loan eligibility by using PMAY loan eligibility calculator

Make sure to fulfil the essential eligibility requirements laid down under the scheme to qualify as a beneficiary for affordable house purchase with a subsidised home loan.

PMAY subsidy scheme for MIG I & II category is not extended by regulatory. Category wise scheme validity is mentioned below:

     1. EWS & LIG category is valid up to 31st March 2022

     2. MIG I & MIG II category was valid up to 31st March 2021