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1 July 2020

Home Loan Under Pradhan Mantri Awas Yojana: Eligibility, Interest, Preference to Women

As per a report published in March 2020, the government has approved an investment of Rs.6.16 lakh crore under the Pradhan Mantri Awas Yojana or PMAY scheme. This scheme, introduced in 2015, aims at providing affordable housing for both India’s rural and urban poor by the year 2020.

One of the most popular government schemes introduced over the years, the PMAY’s scope of operations is divided into two categories – the PMAY Urban and PMAY Gramin. Among these, the former’s objective mostly includes rehabilitating slum dwellers, approving grants for individual house construction led by beneficiaries, as well as, Credit-Linked Subsidy Scheme. On the other hand, PMAY Gramin aims to provide brick and mortar housing facilities to the homeless and those living under dilapidated conditions.

Benefits on Home Loans Under PMAY

One of the primary components of PMAY Urban is its Credit-Linked Subsidy Scheme or CLSS under which eligible candidates can avail concession on the interest payable against home loans. It is one of the notable benefits pertaining to how PMAY can ease your way to become a homeowner.

PMAY applicants belonging to the following categories can enjoy the facility of a subsidised home loan interest rate, and consequently lower EMIs, that can make home loans more affordable.
  • Lower income group/economically weaker section – Individuals belonging to a family with an annual income from Rs.3 - 6 lakh.
  • MIG I or Middle Income Group I – This category constitutes of those with an annual household income from Rs.6 - 12 lakh.
  • MIG II or Middle income Group II – Those with an annual household income between Rs.12 lakh and Rs.18 lakh belong to this category.
Now, those belonging to the above categories, especially the middle income groups can avail the following subsidy on their home loan interest rates under the CLSS component of PMAY government schemes.
  • Those belonging to MIG I can avail a 4% deduction on their interest rates against home loans of up to Rs.9 lakh. Any amount approved over this limit will not be eligible for subsidy.
  • For individuals belonging to MIG II, a subsidy of 3% is applicable on interest rates against home loans of up to Rs.12 lakh.
Thus, the maximum subsidy that individuals belonging to middle-income groups can avail under CLSS amounts to Rs.2.35 lakh and Rs.2.30 lakh, respectively. Such notable concessions on interests make PMAY one of the top government housing schemes to purchase a home in India.

Eligibility to Avail the Benefits Under CLSS

Apart from satisfying the requirements pertaining to their economic status, individuals will also have to fulfil certain eligibility criteria to avail the benefits under such government schemes. These include –
  • There should be at least one female family member who co-owns the property in question.
  • The beneficiary or any of his/her family members must not own any brick and mortar house anywhere in India.
  • Applicants should not be under the purview of any other government housing schemes.
  • The property to be purchased must be located within the statutory towns as per the 2011 Census.
Fulfilling these eligibility criteria defines how urban residents can get a house via PMAY.

How Can Women Benefit From CLSS Under PMAY?

Apart from the eligibility criteria which mandate a female to be the co-owner of the property to avail CLSS benefits, the government scheme also extends preference to women when it comes to choosing beneficiaries.

It is in an effort to ensure that women, alongside other minorities like senior citizens, transgender individuals and those belonging to Schedules Caste/Scheduled Tribes, etc., have a fair shot at availing the Pradhan Mantri Awas Yojana Benefits.

Nonetheless, individuals belonging to any of the above-mentioned categories must first ensure that they comply with the eligibility criteria before applying for a hassle-free application approval.

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