Pradhan Mantri Awas Yojana

Owning a home is like a dream come true. Unfortunately, there are around 78 million people in India who still don’t have a regular and safe shelter. Therefore, the Government of India took up a serious step towards giving them a rooftop with the introduction of Pradhan Mantri Awas Yojana (PMAY).

Under the PMAY scheme, the Government of India aims to fulfill the dream of first-time homebuyers by offering them affordable home loans to buy a ‘pucca’ residential house. It aims to provide a roof to over 20 million urban people by the year 2022.

For this, the Ministry of Housing and Urban Poverty Alleviation has set a route map and has defined certain eligibility criteria which the borrower has to meet. This Credit Linked Subsidy Scheme (CLSS) is one of the verticals of Pradhan Mantri Awas Yojana (PMAY) for Lower Income Group/Economically Weaker Section (EWS/LIG) and Middle Income Group (MIG – I & II).

Key Eligibility Criteria for PMAY Housing Loan Scheme

• You should be the first-time homebuyer who will stay in the home.
• The loan applicant should not have availed any central/state government subsidy or benefit for buying a home under the PMAY scheme.
• Currently, the loan applicant should not own any property under their name and along with any of the family members (including the dependents).
• The home renovation or improvement loans, self-construction loans will be allocated only for EWS and LIG categories.
• The property should be located under urban areas /statutory towns as per the 2011 Census.

The funds from the PMAY home loan scheme can be utilized by the beneficiary families for either acquiring or purchasing a new home or upgrade their existing kutcha or semi-kutcha homes.

Benefits of Pradhan Mantri Awas Yojana Home Loan

• This scheme offers an opportunity for millions of families in India, compromising of husband, wife, and unmarried children to purchase a house at lower costs. And there are certain credits or interest rate subsidies on the PMAY home loan in India.
• The amount of interest rate subsidy will depend on the income category such as EWS, LIG, MIG – I or MIG -II to which the family belongs.

Subsidies on the Pradhan Mantri Aawas Yojana Home Loan

• Those applicants who come under the Economically Weaker Sections (EWS) and Low Income Groups (LIG) can avail credit linked subsidy for loan amount up to Rs 6 lakhs with an interest rate of 6.5% p.a for the tenure of 20 years. The maximum interest subsidy is up to Rs 2.67 lakhs for EWS or LIG groups.
• Similarly, the MIG – I group can avail the credit-linked subsidy for loan amounts up to Rs. 9 Lakh at the interest rate of 4% p.a. for the tenure of 20 years whichever is lower. And MIG – 2 can avail the credit-linked subsidy for loan amounts up to Rs. 12 Lakh at the interest rate of 3% p.a. for 20 years tenure or home loan tenure, whichever is lower. The maximum interest subsidy is up to Rs 2.35 lakhs for MIG-I & Rs 2.30 lakhs for MIG-II borrowers.

Processing Fees for PMAY Home Loan Application

• Under PMAY housing loan, the lender will not be allowed to charge any processing fee from the borrower, provided he or she has given a lump sum of Rs 3000 to cover the costs of loan processing for an amount up to Rs 6 lakhs.
• For additional loans beyond Rs 6 lakhs, the lender will be allowed to recover a normal processing fee.

Balance Transfer, under PMAY Home Loan Application

• Borrowers are allowed to transfer their current home loans under the CLSS scheme. But he or she cannot claim the subsidy again on such home loan refinances. Moreover, they cannot avail of the benefit under the CLSS scheme, by transferring their existing housing loan after the notified date. That’s because the subsidy is available to the borrower when he or she first acquires or constructs the house. If you’re purchasing the house, it can be resale one from another owner or a builder as well.