Government to Provide Huge Interest Subsidy Under PMAY on Home Loans

Government to Provide Huge Interest Subsidy Under PMAY on Home Loans

The flagship programme of the Indian government, Pradhan Mantri Awas Yojana, or PMAY, was inaugurated in June 2015 to promote the notion of “Housing for All.” The programme aims to improve the lives of homeless individuals in India. The scheme’s major plan is to build two crore dwellings for low-income families, middle-income groups, and economically disadvantaged people. The government has approved 1.12 crore dwellings so far.

The initiative attempts to increase the number of residences built using environmentally-friendly materials. The goal is to cause as little environmental damage as possible, as well as minimal air and sound pollution. 

The scheme aims to address the housing needs of the urban poor, including slum dwellers, through various measures and incentives, such as the promotion of affordable housing for weaker sections through credit-linked subsidies, slum rehabilitation with the participation of private developers using land as a resource, and so on.

Under the scheme, banks give loans at a reduced interest rate since the government pays the rest on the applicant’s behalf. Subsidized loans enable more economically disadvantaged people to build a home. The following is the fundamental eligibility criteria to apply for PMAY:

1. The applicant’s family must not own a home anywhere in India

2. The applicant’s family must not have participated in any of the Government of India’s housing-related programmes in the past.

3. In the event of a married pair, either a single or joint ownership agreement is permitted, with both receiving the same subsidy. 

Who Can Be the Beneficiary of the Scheme?

1. Economically Weaker Section (EWS): The EWS category includes those with yearly household income less than Rs.3 lakh. An applicant claiming to be under EWS must supply the government with required proof for their claims to be verified. 

2. Low Income Group (LIG): People in the LIG category typically have a household income of Rs.3 lakh to Rs.6 lakh per year. They must, once again, give sufficient documentation of their financial situation to be considered. 

3. Middle Income Group (MIG1): Those with an annual household income of less than Rs.12 lakh are classified under MIG1. These individuals are eligible for loans of up to Rs.9 lakh for the construction of a home.

4. Middle Income Group (MIG2): Those with an annual household income between Rs.12 and Rs.18 lakh are eligible to apply under the PMAY scheme’s MIG2. These individuals are eligible for loans of up to Rs.12 lakh. 

5. Minorities: People from minority groups, such as SC/ST/OBC, shall be classified as minorities. Individuals belonging to this category must be able to produce the required caste and income credentials to be considered for the PMAY scheme. 

6. Women: If they apply under the PMAY system, women from the EWS/LIG groups are considered.

Documents Required for Applying for PMAY

1. Aadhaar Card/Pan Card 

2. Passports are required for NRIs. 

3. Proof of address 

4. For salaried employees, salary slips and form no.16 are required. 

5. For self-employed or professionals, last three years’ income tax returns, as well as financials, are required. 

6. Last 6 to 12 months’ bank statements 

Key Provisions Under the PMAY-CLSS

Interest rate Subsidy6.5% p.a.6.5% p.a.4% p.a.3% p.a.
Maximum Loan Tenure20 years20 years20 years20 years
Maximum Interest SubsidyRs.2.67 lakhsRs.2.67 lakhsRs.2.35 lakhsRs.2.30 lakhs
Maximum Loan Amount that Qualifies for SubsidyRs.6 lakhsRs.6 lakhsRs.9 lakhsRs.12 lakhs
Max. Unit Carpet Area30 sq. m60 sq. m160 sq. m200 sq. m
NPV Discount of Interest Subsidy9.00%9.00%9.00%9.00%

Subsidy Application Process for PMAY

The steps in the application process are as follows:

  1. Go to and fill out the required information, including your Aadhaar number and income information.
  2. Submit the completed form, along with any required documentation, to authorised financial institutions.
  3. Contact your preferred financial institution listed under PMAY to apply for a house loan.
  4. Your subsidy application will be forwarded to a Central Nodal Agency by the financial institution (CNA).
  5. Upon verification of your application, the CNA disburses the subsidy amount to the lending institution, lowering the loan amount you must repay.

Thus, PMAY Mission will provide central assistance to implementing agencies through States and UTs in building houses for low-income groups. We hope this article helped you understand PMAY and its process much better.