E HOME LOAN
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 remains 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.
PMAY subsidy scheme for MIG I & II category is not extended by regulatory. Category wise scheme validity is mentioned below:
Pradhan Mantri Awas Yojana is affordable housing for all schemes launched by the Indian government in 2015. The scheme looks to construct and provide residence to 20 million families by 2022. The benefits of this 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 as follows –
To further understand what is PMAY, one must also assess the different economic classes eligible to receive its benefits. They are –
Individuals with home loans under PMAY would 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.
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 Pradhan Mantri Awas Yojana Gramin can expect 25 square metre pucca homes. Other important features of this scheme are –
Eligibility for this Gramin housing scheme is limited to families, which 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.
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 subsidy benefits was limited to March 2020. However, since then, it has been extended to March 2021.
The Middle Income Group-I or MIG-I comprise of families with an annual income ranging between Rs.6 lakh and Rs.12 lakh. This particular group is eligible to acquire 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 hold an annual income range of between Rs.12 lakh and Rs.18 lakh. As per PMAYU benefits, such families can avail 3% subsidies on their housing loan rates, although 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 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.
Apart from building affordable housing, the Pradhan Mantri Awas Yojana also provides subsidised home loan rates to eligible borrowers. However, to avail of PMAY credit linked subsidy scheme benefits, applicants must fulfil all of the criteria listed below –
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 4% subsidies, while MIG-II members can acquire 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 for MIG-II is between Rs.12 lakh and Rs.18 lakh.
To understand the income requirements, applicants should assess various PMAY categories beforehand. The following table lists various groups as per their annual income requirement.
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
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. MIG-I applicants can acquire up to 160 square metre homes. However, LIG beneficiaries are limited to 60 square metre units, while EWS members are restricted to just 30 square metre houses.
Balance transfer or refinancing is a procedure using 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. 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 tenure for such subsidised housing loans is fixed at 20 years. In case of a balance transfer, one is actually foreclosing the original home loan before its tenure 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 lower rates, even when such rates are available.
Additionally, the restrictions also prevent individuals from availing other refinance benefits, such as top-up loans. A top-up loan is an additional credit offered by some financial institutions after refinancing a housing loan from another lender to them. This end-use free advance can aid borrowers to meet other financial requirements, besides their housing needs.
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. The table below should help an individual assess maximum home loan amount on which the related subsidy is applicable –
Home loan principal on which subsidy is applicable
For instance, if an EWS applicant avails a loan of Rs.10 lakh, subsidy would be applicable on Rs.6 lakh of this amount, while normal interest rate would be charged on the remaining Rs.4 lakh of loan principal. All applicants must understand this intricacy, to ensure maximum benefits without encountering financial strain.
Under the PMAY scheme, families or households must meet certain 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 central assistance under any other housing scheme in the past. Lastly, families comprising of 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 a particular home loan amount. Still, a potential applicant needs to know about certain exceptions to these guidelines as well.
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 acquire subsidies, 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 PMAY benefits, provided they have not done so already in the past.
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.
For example, consider that the home loan principal is Rs.20 lakh and the borrower belongs to MIG-I category. Processing fee for his chosen lender is 2%. Now, as per PMAY guidelines, subsidy is applicable, in this case, on the principal sum of Rs.9 lakh. Thus, the processing fee would be charged on Rs.11 lakh, instead of on Rs.20 lakh.
With PMAY benefits, the borrower would need to service Rs.22000 as processing charges on his home loan amount. Otherwise, he would have paid Rs.40000 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 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.
The subsidy amount from the PMAY scheme may take anywhere between 3 and 4 months to reach beneficiaries. However, after application, individuals would 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 would need to wait for this list and check the same before claiming subsidy benefits.
The process to check such a list is simple and would involve the following steps –
To check the PMAY G list, individuals would need to follow these steps –
Depending on whether one’s application is sanctioned or not, he/she can plan the home loan amount to avail.
Individuals can avail PMAY benefits or subsidies on any residential property, provided this property is located 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 this scheme’s benefits on the purchase of another residential property.
Another important factor to remember is that PMAY Gramin beneficiaries acquire affordable housing, whose construction is funded jointly by state and central governments. In such cases, the benefits are restricted to that housing unit and not any other.
Lastly, the dwelling unit sizes are specified under PMAY guidelines for each income category. Thus, to avail PMAY benefits, applicants would 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.
All future affordable housing scheme applicants should be aware of the various conditions for PMAY benefits. These are as follows –
A common misconception in the minds of many PMAY beneficiaries is that they receive the subsidised amount in their savings account. However, their accounts are not credited with this amount. Instead, this amount is credited to their home loan accounts. In essence, the subsidised amount is reduced from the outstanding principal amount, in turn, resulting in lower EMI. This new EMI is calculated by applying the pre-determined interest rates on the new outstanding principal sum.
For example, a PMAY beneficiary opted for a home loan of Rs.30 lakh and he is eligible for a subsidy of Rs.2.35 lakh. This is deducted from the outstanding principal sum, thereby effectively reducing the outstanding loan amount to Rs.27.65 lakh. Thus, interest and EMI would be calculated on this new principal, thereby reducing overall financial burden for borrowers.
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.
A PMAY list contains the name of all applicants whose application for this particular 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 this Pradhan Mantri Awas Yojana list to take advantage of the housing scheme benefits.
Here is how PMAYU applicants can check such a list online –
The process to check the list for PMAY Gramin beneficiaries is slightly different. In such a case, here a few steps to follow –
Pradhan Mantri Awas Yojana can reduce financial strain on individuals looking to buy or construct a residential property. Nevertheless, interested parties must fulfil all of the stringent eligibility norms to secure such a subsidy. These PMAY eligibility criteria involve –
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.
When considering who is not eligible for PMAY benefits, one should assess the eligibility criteria for this scheme. In short, the following individuals do not qualify for the subsidies or other benefits under this scheme –
Assessing who is not eligible for PMAY can also clarify to one whether he/she is qualified to receive the said benefits. This should save applicants from eventually facing PMAY application rejection or from disappointment linked to such an outcome. Such potential homeowners should start looking at alternative schemes or plans that would help them buy a property without facing financial pressure.
Indira Awas Yojana was launched by the Rajiv Gandhi Government in 1985 as a subs-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, this 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. After 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.
Also, under this Indira Awas Yojana scheme, the percentage of women property owners have increased significantly. One of the eligibility criteria states that applicants must put forth the name of an adult female member of the family as property owner or co-owners whenever possible.
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