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PMAY – Frequently Asked Questions

Pradhan Mantri Awas Yojana FAQs

Pradhan Mantri Awas Yojana is a centralised scheme offering hassle-free assistance to homeless individuals in India. Nevertheless, much of the features, benefits, eligibility, documentation, and other important aspects of this scheme remain unknown to first-time homeowners.

The following Pradhan Mantri Awas Yojana FAQ section should help such individuals learn about the various advantages of this plan. The following FAQs on Pradhan Mantri Awas Yojana should also shed light on some of the intricate terms and conditions of this centralised credit-linked subsidy scheme.

Note: The PMAY subsidy scheme has been not extended by the regulatory authority for MIG I and II categories. Please check the category-wise scheme validity below.

  •  EWS and LIG category is valid up to 31st March 2022
  •  MIG I and MIG II category was valid up to 31st March 2021

1. What is the Pradhan Mantri Awas Yojana?

Pradhan Mantri Awas Yojana is an affordable housing for all scheme launched by the Indian government in 2015. It looks to construct and provide residence to 20 million families by 2022. The benefits of the PMAY scheme are available in two distinct categories, namely Pradhan Mantri Awas Yojana Urban, or PMAY (U), and Pradhan Mantri Awas Yojana Gramin, or PMAY (G).

The primary goals of this centralised housing scheme are:

  • Providing housing loans at subsidised rates to eligible applicants and encouraging the construction and purchase of residences
  • Provide rehabilitation to slum dwellers by constructing affordable housing and facilitating financial assistance
  • Enabling collaboration between the public and private sectors to ensure affordable houses for all Indians
  • Renovation and construction of affordable housing for eligible households

To further understand what is PMAY, one must also assess the different economic classes eligible to receive its benefits, namely:

  • Economically weak section or EWS
  • Low Income Group or LIG
  • Middle Income Group-I or MIG-I
  • Middle Income Group-II or MIG-II

Individuals with home loans under PMAY need to service interest at subsidised rates. While homeowners pay a portion of the total interest accumulated, the remaining is borne by the government, thereby ensuring easier home loan repayment.

2. What is the Pradhan Mantri Awas Yojana Gramin?

The Pradhan Mantri Awas Yojana Gramin, or PMAYG, is a part of the ‘affordable housing for all’ scheme launched by the Indian government in 2015. While the overarching goal is to build 20 million homes for the homeless by 2022, beneficiaries of the Pradhan Mantri Awas Yojana Gramin scheme can expect 25 square metre pucca homes. Other important features of this scheme are:

  • The division of scheme-related home construction cost between the Centre and State in a 60:40 ratio, wherein each unit receives Rs.1.20 lakh worth of financial assistance
  • In the Himalayan regions, Jammu and Kashmir, and North-Eastern states, the centre sponsors 90% of the construction costs, while the state is responsible for the remaining 10%
  • 100% of the cost is to be borne by the Central Government in case of beneficiaries in Union Territories
  • In association with the Swachh Bharat Abhiyan, PMAYG beneficiaries are set to receive Rs.12,000 as financial assistance to construct toilets in their homes

The eligibility for the Gramin housing scheme is limited to families that lack literate adults over 25 years of age. Also, applicants must not own any other pucca homes to qualify for this scheme’s benefits. Another crucial criterion to fulfil is that the applying individual must have a family member aged between 16 and 59 years.

3. What is Pradhan Mantri Awas Yojana Urban?

Pradhan Mantri Awas Yojana Urban is a ‘housing for all’ scheme launched in 2015. Its main aim is to provide affordable housing to all urban area residents by 2022. Under this component of PMAY, individuals belonging to Middle Income Groups 1 and 2 can acquire housing loans at subsidised rates. Initially, the opportunity to avail of subsidy benefits was limited to March 2020; however, it was then extended to March 2021.

The Middle Income Group-I, or MIG-I, comprises families with an annual income ranging between Rs.6 lakh and Rs.12 lakh. This particular group is eligible for an interest subsidy of 4% or an NPV of up to Rs.2.35 lakh as subsidy on home loan. Keep in mind that the maximum principal on which this subsidy is applicable is Rs.9 lakh.

On the other hand, MIG-II categorised households are those that have an annual income range of between Rs.12 lakh and Rs.18 lakh. As per PMAYU benefits, such families can avail of 3% subsidies on their housing loan rates; however, the savings cannot exceed Rs.2.30 lakh. Here, the maximum loan amount for subsidy calculation is restricted to Rs.12 lakh.

Besides these, applicants must not own any other pucca houses in India to apply for the PMAY-U. Also, the beneficiary’s family members or the applicant should not have availed of central assistance in the form of housing schemes in the past.

Besides these, applicants must ensure not to own any other pucca houses in India. Also, the beneficiary’s family members or the applicant should not have availed central assistance in the form of housing schemes in the past.       

4. Who can apply for the PMAY Credit Linked Subsidy Scheme?

Apart from building affordable housing, the Pradhan Mantri Awas Yojana also provides subsidised home loan interest rates to eligible borrowers. However, to avail of PMAY credit linked subsidy scheme benefits, applicants must fulfil all the criteria listed below.

  • The applicant or his/her family must not own any pucca house or property in India
  • The family should not have benefited from other central assistance in the country
  • Besides minorities, households classified under the economically weaker section (EWS), low income group (LIG), and middle income group I and II (MIG-I and MIG-II) are eligible for CLSS benefits

Depending on one’s economic category, the total subsidy rate can differ significantly. For instance, both LIG and EWS applicants qualify for 6.5% subsidies on their housing loans. On the other hand, MIG-I members can avail of a 4% subsidy, while MIG-II members can avail of 3% as PMAY CLSS.

To be classified under the economically weaker section, one’s family income should be below Rs.3 lakh per year. For low income groups, this familial income in a year can be between Rs.3 lakh and Rs.6 lakh. The range of annual income for MIG-I is between Rs.6 lakh and Rs.12 lakh, while that for MIG-II is between Rs.12 lakh and Rs.18 lakh.

5. What are the income norms for various PMAY categories?

To understand the income requirements, applicants should assess various PMAY categories beforehand. Another crucial factor where the categories differ is the actual size of the housing unit allocated. MIG-II members are allowed to opt for homes measuring up to 200 square metres under this scheme, whereas MIG-I applicants can acquire up to 160 square metre homes. On the other hand, LIG beneficiaries are limited to 60 square metre units, while EWS members are restricted to just 30 square metre houses. 

Categories

Annual Family Income Range

 Economically weaker section (EWS)

up to Rs.3 lakh

 Low income group (LIG)

Between Rs.3 lakh and Rs.6 lakh

Middle income group-I (MIG-I)

Between Rs.6 lakh and Rs.12 lakh

 Middle income group-II (MIG-II)

Between Rs.12 lakh and Rs.18 lakh

6. Can I transfer my existing home loan under CLSS?

Balance transfer or refinancing is a procedure through which borrowers can reduce their EMI and interest outgo. With it, one simply shifts an existing home loan from one lender to another to take advantage of more competitive interest rates and better lending terms. However, beneficiaries of PMAY or any other CLSS schemes would lose their subsidy rates in the event of such a balance transfer.

Pradhan Mantri Awas Yojana benefits are available to each family/individual only once. Furthermore, the tenor for such subsidised housing loans is fixed at 20 years. In the case of a home loan balance transfer, one is actually foreclosing the original home loan before its tenor ends. Doing so immediately cancels one’s subsidies.

Thus, PMAY applicants should carefully choose their lender before initiating loan application. Unlike standard housing loan borrowers, they are unable to refinance their credit later. This can effectively limit beneficiaries from availing of lower rates, even when such rates are available.

Additionally, the restrictions also prevent individuals from availing of other refinance benefits, such as top-up loans. A top-up loan is an additional credit offered by some financial institutions when they refinance a housing loan, taking over from another lender. This end-use free advance can aid borrowers to meet other financial requirements besides their housing needs.

7. Is there a limit on the home loan amount under the PMAY scheme?

The home loan amount depends on the cost of the underlying property for PMAY beneficiaries, as is the case with standard housing credit. However, the PMAY scheme restricts the loan amount on which subsidy is applicable. Again, this restriction varies based on the economic category an applicant belongs to. For instance, if an EWS applicant avails a home loan of Rs.10 lakh, the subsidy is applicable on Rs.6 lakh of this amount and the normal interest rate is applicable on the remaining Rs.4 lakh of loan principal.. All applicants must understand this intricacy, to ensure maximum benefits without encountering financial strain. 

Category

Home loan principal on which subsidy is applicable

 EWS

Rs.6 lakh

 LIG

Rs.6 lakh

MIG-I

Rs.9 lakh

 MIG-II

Rs.12 lakh

8. What constitutes a household/beneficiary family?

Under the PMAY scheme, families or households must meet certain PMAY eligibility criteria to be considered eligible for related benefits.. Firstly, the beneficiary family must not own another pucca house anywhere in India at the time of application. Another important factor to fulfil here is that the beneficiary family should not have availed of central assistance under any other housing scheme in the past. Lastly, families comprising one or more adult female members must name one of them as an owner or co-owner of the property in question.

Financial lenders also check these pointers strictly before sanctioning the home loan amount. Still, a potential applicant must know about the exceptions to these guidelines.

An adult and earning family member can be treated as a separate family, even if he/she lives with parents. Thus, this member is still eligible to opt for PMAY benefits even though his/her family has already benefited from the scheme. Nevertheless, to avail of the subsidy, he/she would need to fulfil the criteria of not owning another pucca house anywhere in India.

Similarly, a married couple residing at a rented property is considered a separate household, and both spouses are eligible to avail of PMAY benefits, provided they have not done so already in the past.

9. Does one have to pay a processing fee to avail of the PMAY scheme?

Normally, individuals need to bear a percentage of their housing loan principal as processing fee. However, for PMAY scheme beneficiaries, the rule is different. These individuals do not need to bear a processing fee on the subsidised portion of their loan principal. Financial lenders are free to charge a nominal processing fee on the rest of this principal amount.

As an example, let’s consider a case where the home loan principal is Rs.20 lakh, the borrower belongs to the MIG-I category, and the processing fee levied by the chosen lender is 2%. Now, as per PMAY guidelines, in this case, the subsidy is applicable on the principal sum of Rs.9 lakh. Thus, the processing fee would be charged on Rs.11 lakh, instead of the entire Rs.20 lakh.

With PMAY benefits, the borrower will need to service Rs.22,000 as processing charges on the home loan amount. Otherwise, he would have paid Rs.40,000 as processing expenses alone.

Besides this expense, borrowers should also know about PMAY application charges. Online applicants do not need to pay any such fees; however, if one decides to submit the Pradhan Mantri Awas Yojana application offline, he/she would have to pay Rs.25 (excluding GST) as an application fee. Understanding such charges can help beneficiaries ease the application process significantly

10. How much time does it take for a PMAY subsidy to get approved?

The subsidy amount from the PMAY scheme may take anywhere between 3 and 4 months to reach beneficiaries. However, after application, individuals need to wait for a significant period or up to a year before they can confirm whether their application was met with approval. Each year, the Indian government publishes a list of applicant names whose Pradhan Mantri Awas Yojana benefits are sanctioned. One needs to wait for this list and check the same before claiming subsidy benefits.

The process to check such a list is simple and includes the below steps.

  • Step 1: Visit the official PMAY website
  • Step 2: Navigate to the ‘Search Beneficiary’ drop down menu and select ‘Search by Name’ option under it.
  • Step 3: Enter the first three characters of the applicant’s name and click on search.
  • Step 4: A list should appear containing names beginning with those three characters; the applicant must locate his/her name here and verify all other details

To check the PMAY G list, individuals would need to follow these below steps

  • Step 1: All applicants to the Gramin part of this scheme receive a registration number after application
  • Step 2: Visit the official PMAY portal and enter this registration number
  • Step 3: You can only view your name if this registration number is present on the approved list

Depending on whether one’s application is sanctioned or not, he/she can plan the home loan amount to avail of.

11. Do all flats/houses come with PMAY benefits?

Individuals can avail of PMAY benefits or subsidies on any residential property, provided the property is in one of the recognised statutory towns as per the Census of 2011. Potential homeowners would do well to check the names of such towns and verify whether their planned property purchase lies within these specified areas.

Another crucial pointer to remember is that each individual is eligible to claim PMAY benefits only if he/she does not already own a pucca house anywhere in India. For instance, if one inherits property from her parents, she is no longer eligible to avail of this scheme’s benefits on the purchase of another residential property.

Another important factor to remember is that PMAY Gramin beneficiaries acquire affordable housing, the construction of which is funded jointly by state and central governments. In such cases, the benefits are restricted to that housing unit and not any other.

Lastly, dwelling unit sizes are specified under PMAY guidelines for each income category. Thus, to avail of PMAY benefits, applicants need to ensure that the house or flat they choose does not exceed the maximum space allowed under this scheme. For MIG-II, this limit is 200 square metres, while for EWS it is just 30 square metres. 

12. What are the conditions for PMAY?

All future affordable housing scheme applicants should be aware of the various conditions for PMAY benefits; these include:

  • An applicant should not own a pucca house in India while applying for this subsidy scheme.
  • The annual family income of the applying household should come under one of the four economic categories, namely EWS, LIG, MIG-I or MIG-II. If income exceeds this range, the applicant is automatically disqualified from claiming PMAY benefits.
  • Applying households should have an earning member aged between 16 and 59 years.
  • An applicant or his family should not have acquired central assistance from any other housing schemes at any time.
  • One of the most important PMAY conditions is that families must name an adult female member as owner or co-owner of the resulting property.
  • If no adult female is a part of the family at the time of application, only then can the resulting home be owned solely by an adult male member.
  • PMAY terms and conditions also state that the property in question should be in one of the statutory Indian towns according to 2011’s Census.
  • The maximum dimensions for the property are restricted according to the four economic categories. The MIG-II group can claim PMAY benefits on purchase of houses measuring up to 200 square metres, while EWS members can only acquire such benefits if the residence measures up to 30 square metres.
  • Maximum interest subsidy is limited to 6.5% for EWS and LIG. For MIG-I, it is 4% and for MIG-II, this subsidy is capped at 3%. 

13. How is the PMAY subsidy credited

A common misconception in the minds of many PMAY beneficiaries is that they receive the subsidised amount in their savings account. The fact is that the amount is credited to their home loan accounts. In essence, the subsidised amount is reduced from the outstanding principal amount, resulting in lower EMIs. The new EMI amount is calculated by applying the pre-determined interest rates on the new outstanding principal sum.

For example, if a PMAY beneficiary opts for a home loan of Rs.30 lakh and he is eligible for a subsidy of Rs.2.35 lakh, the subsidy amount (Rs.2.35 lakh) is deducted from the outstanding principal sum (Rs.30 lakh), effectively reducing the outstanding loan amount to Rs.27.65 lakh. Thus, interest and EMI are then calculated on this new principal, thereby reducing overall financial burden for borrowers.

14. When was the Pradhan Mantri Awas Yojana Launched?

The Pradhan Mantri Awas Yojana was launched by the Government of India in 2015 in a bid to provide affordable housing to all. It aims to construct around 20 million houses for individuals belonging to below poverty line or BPL by March 2022. The Indira Awas Yojana (IAY) preceded PMAY, providing similar benefits under affordable housing since 1985. After the Pradhan Mantri Awas Yojana was established, the IAY was restricted into PMAY due to the similar goals they held

15. How to check the PMAY List?

A PMAY list contains the names of all applicants whose application for this government subsidy is approved. Such lists are published by the Indian government every year, enabling beneficiaries to check and verify their inclusion. Potential homeowners should know how to check the Pradhan Mantri Awas Yojana list to take advantage of the housing scheme benefits.

Here is how PMAYU applicants can check the list online:

  • Step 1: Visit the official PMAY portal.
  • Step 2: Choose the ‘Search by Name’ option, listed under the drop down menu for ‘Search Beneficiaries’.
  • Step 3: Type in the first three characters of an applicant’s name, and a corresponding list should appear of all approved names with similar names.
  • Step 4: Find your name and details to confirm government subsidy.
  • Step 5: Check additional details on this list page as well.

The process to check the list for PMAY Gramin beneficiaries is slightly different. Here is how applicants can check the list online:

  • Step 1: Note the registration number after application to PMAY Rural benefits.
  • Step 2: When the list is published, visit the official PMAY portal online.
  • Step 3: Enter the corresponding registration number and check whether pertinent information shows up. An applicant’s details would only show if his/her application is approved.

16. How to check PMAY eligibility criteria?

The Pradhan Mantri Awas Yojana can reduce financial strain on individuals looking to buy or construct a residential property. Interested parties must fulfil all the stringent eligibility norms to secure subsidy under the scheme. You can use the PMAY eligibility calculator to know your eligibility beforehand. PMAY eligibility criteria include:

  • Applicants or their family members must not own a pucca house anywhere in India while applying for scheme benefits.
  • An individual availing of said benefits should not have acquired central assistance related to housing from any other credit-linked subsidy schemes.
  • If an adult female member is present in the applicant’s family, she should be named sole owner or co-owner of the purchased property. Only in the absence of such a member, an adult male member can become the sole owner.
  • The concerned property should be located in one of the statutory towns recognised during the Census 2011.

Besides these criteria, applicants’ incomes are also considered. If the family income of an individual exceeds Rs.18 lakh per year, he/she is no longer eligible to claim PMAY benefits.

Under this scheme, applicants are divided into four categories based on the yearly familial income. The subsidy rate applicable is determined by the category an applicant belongs to. The Economically Weaker Section or EWS category receives the maximum subsidies, while the MIG-II category receives the least. 

17. Who is ineligible for PMAY

As per the eligibility criteria for PMAY, the below individuals do not qualify for the subsidies and benefits under this scheme.

  • Individuals who already own a pucca house
  • An applicant who has received benefits from a credit linked subsidy scheme related to housing in the past. This can be PMAY or any other centralised assistance programme.
  • Individuals whose chosen properties do not lie in one of the statutory towns in India.
  • Applicants with income exceeding Rs.18 lakh per annum.

18. What is Indira Awas Yojana?

Indira Awas Yojana was launched by the Rajiv Gandhi Government in 1985 as a sub-scheme of the Rural Landless Employment Guarantee Programme (RLEGP). At that time, this scheme was concerned with building affordable houses for individuals below the poverty line or BPL. However, when the Pradhan Mantri Awas Yojana scheme came into realisation in 2015, the Indira Awas Yojana was incorporated into it.

Today, IAY is also known as the Pradhan Mantri Awas Yojana Gramin. Its primary goal is still the provision for affordable housing for all, irrespective of economic background. Since its integration into PMAYG, IAY benefits are available to minorities, economically weaker sections, and low-income groups. Each of these groups are liable to acquire a certain percentage of subsidies on their housing credit.

Alternatively, they can also benefit from specialised housing unit construction, which are funded partly by the concerned state and the Central government. Nevertheless, like all other PMAY benefits, such units are only available to qualified applicants of this scheme. For instance, only individuals or families with no other pucca homes in India are qualified to receive PMAY assistance.