The PMAY is a landmark scheme aimed at holistically improving the living standards of the economically vulnerable sections of the Indian society by providing them access to affordable housing solutions.
The Pradhan Mantri Awas Yojana eligibility primarily centres on such individuals and only recently included individuals from the middle income and high-income gradients with an aim to bolster the real estate sector and the Indian financial sector in total.
Providing affordable housing for all is limited to both the urban and rural sectors of our country. Although an out and out housing scheme, how it provides the benefits is largely dependent on the loan subsidies offered under the Credit Linked Subsidy Scheme.
What is the Credit Linked Subsidy Scheme?
The CLSS is a subsidy scheme offered by the Central Government. With the help of this housing plan, homebuyers are offered an interest subvention on home loans for purchase, construction or enhancement of a residential property.
The maximum repayment period of housing credits offered under CLSS is 20 years with subsidised rates of interest which vary as per the annual family income of the applicant. The home loan subsidy provided under this government initiative can be categorised as per the following sections –
- Economically weaker section: Those who have an annual household income up to Rs.3 lakh belong to this class. The upfront loan amount for subsidy in case of EWS category is Rs.2.67 lakh at a subsidised interest rate of 6.50%. The maximum loan amount offered is Rs.6 lakh for a house of carpet area 30 sq. metres.
- Low-income group: Similar to EWS, the subsidy interest amount for this category is also Rs.2.67 lakh as well as the subsidised interest rate, i.e. 6.50%.
However, individuals with an annual household income ranging from Rs.3 lakh to Rs.6 lakh belong to LIG, and they can avail the loan for acquisition or construction of a house which has a carpet area of 60 sq. metres
- Middle-income group-1: Individuals who have an annual family income of Rs.6 lakh to Rs.12 lakh fall under MIG-1. They can avail a maximum loan amount of Rs. 9 lakh at a subsidised interest rate of 4.0%.
The upfront interest amount for subsidy comes to Rs.2.35 lakh for the acquisition of a property with a carpet area of 160 sq. metres.
- Middle-income group-2: Those with an annual household income up of Rs.12 lakh to Rs.18 lakh fall under the MIG-2. They can avail a maximum home loan amount of Rs.12 lakh under this subsidy scheme at a subsidised home loan interest rate of 3.0%.
So, the interest amount for subsidy interest amount is around Rs.2.30 lakh for purchase of a house of 200 sq. metres carpet area.
This is how the credit-linked subsidy scheme works, which is subject to alterations after the end of the financial year 2019-20.
Pradhan Mantri Awas Yojana Eligibility Criteria
The particulars of the CLSS are the primary highlights of the PMAY eligibility. However, applicants are required to be aware of these terms and conditions as well before availing a housing credit under this government-backed housing scheme –
- Homebuyers with an annual family income, ranging up to Rs.18 lakh, can avail a home loan under PM Awas Yojana.
- Homebuyers who are not an Indian citizen are not eligible for this housing scheme.
- Applicants who do not belong to the EWS, LIG, MIG-1, and MIG-2 can not avail the benefits of this government initiative.
- This housing scheme applies to first-time homebuyers only. Those who already own a pucca house are not eligible.
- The mortgaged property is required to be owned or co-owned by at least one female family member to be eligible for this housing plan.
- Homebuyers, who have already availed a loan under the PMAY scheme previously, or from any other central or state government housing schemes, are not eligible for such benefits.
Several financial institutions in India offer attractive offers on top of the subsidy availed from PMAY in case of home loans which makes it easier for the homebuyer to repay the loan.
Buying a house is one of the crucial decisions of an individual’s lifetime. Those opting for a home loan should take the assistance of a home loan EMI calculator before choosing their repayment tenor.
They can also consult the above discussion to know whether they meet the demands of the Pradhan Mantri Awas Yojana eligibility criteria, which would help them substantially in lowering their financial worries.
