June 26, 2022

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Is PMAY a boon for home-buyers?


Pradhan Mantri Awas Yojana (PMAY) is an ambitious project that was undertaken by the Indian government in 2015. PMAY scheme’s primary objective is to provide housing facilities to every Indian. Its target is to construct over two crore affordable pucca houses by the year 2022. It aims to achieve this goal by offering subsidies on home loans as one of the methods. People may dream about possessing a roof over their heads of their own, but few have the resources to secure this aspiration. Those belonging to the economically weaker sections and low-income groups cannot afford to apply for a housing loan. Additionally, the ever-increasing interest rate serves as a deterrent. Home loan under PMAY acts as a saviour, as it offers a subsidy on the interest. This zealous initiative can be a boon for home-buyers, particularly first-timers. Skyrocketing prices of land and construction equipment among other factors do not make it feasible for the majority of the Indian populace to opt for a home loan. PMAY provides and opens the path for this possibility.

Home Loan Under PMAY: Beneficiaries

Initially, the PMAY scheme was introduced for Economically Weaker Sections (EWS) and Low Income Groups (LIG). Later, its scope expanded to encompass Middle Income Groups (MIG) – I and II. A proper breakdown of the categories will offer a clear and vivid idea regarding the beneficiaries.

● EWS households, earning up to Rs. 3 lakhs annually.

● LIG households, with an annual income ranging from Rs. 3 lakhs to Rs. 6 lakhs.

● MIG-I households, earning between Rs. 6 lakhs to Rs.12 lakh annually.

● MIG-II households, having an annual income between Rs. 12 lakh to Rs.18 lakh.

The Credit Linked Subsidy Scheme (CLSS), a component of PMAY, opened the doors for the middle-income groups to benefit from this government scheme. It is inclusive; it incorporates all the income groups. According to the government’s estimates, 2.5 lakh middle-income families were to benefit from this scheme during 2020-21.

PMAY Eligibility Criteria

The PMAY scheme aims to secure housing facilities for all. Any potential beneficiary should fulfil the following eligibility criteria:

● The beneficiary family should not possess a pucca house in any corner of India.

● The family should not have benefitted from any other housing scheme launched by the Indian government.

● The beneficiary should be an adult who has a regular source of income.

● In the case of EWS/LIG, the presence of an adult female owner is mandatory, whether independent or in joint ownership with a male member. However, if there’s an absence of an adult female, the house’s ownership can be in the name of a male member.

To avoid any duplication, members of the beneficiary family need to provide their unique Aadhaar Card numbers. A beneficiary family primarily constitutes husband, wife and unmarried children. The PMAY guidelines mention one exception. Earning adults, married or unmarried, can opt for PMAY, even if their parents own a house. 

How Does PMAY Subsidy Work?

The CLSS, falling within the purview of the PMAY scheme, offers subsidies on the home loan’s interest rate. Therefore, the burden of loan repayment, including the interest, lessens to a large extent. The subsidy extended varies with change in income groups. Moreover, the house’s carpet area changes too. The tenor of the home loan cannot exceed 20 years.

  Economically Weaker Sections (EWS) Low Income Group (LIG)Middle Income Group (MIG-I )Middle Income Group (MIG-Ii)
Subsidy calculated on a Maximum Home Loan Amount (INR)*6,00,0006,00,0009,00,00012,00,000
Interest Subsidy (%)6.506.5043
Maximum carpet area (sq.m.)6060160200

Note: * There is no cap on the maximum loan amount

Thus, any beneficiary can save extensively with the subsidy provided on the interest rate. The provision of a home loan becomes more accessible with support from the PMAY scheme.

Applying for PMAY and PMAY List

Any eligible beneficiary can apply for PMAY, online or offline. For applying online, you need to:

● Visit the official website of the scheme

● Enter the Aadhaar Card number and other details to apply

For applying through the offline medium, the beneficiary needs to fill an application form, accessible at Common Service Centre (CSC). The government releases the PMAY List with the names of chosen beneficiaries.

The CLSS aspect of the PMAY scheme has been nothing less than a boon for home buyers. With savings up to Rs. 2.67 lakh on interest, first-time homeowners can breathe easy. The Home loan under PMAY is available for different income groups. Hence, it is comprehensive. It empowers not only those in the lower rungs of the economic ladder but also the middle-income groups. In India, the middle class makes 28% of the population. Therefore, this scheme incorporates a substantial percentage of the populace. Moreover, the compulsory provision of having a female adult house owner in the case of EWS and LIG categories is an added advantage. An appropriate step has been taken to empower the women of the marginalised households.

Bajaj Housing Finance Limited (BHFL) also extends the benefits of Home Loan under PMAY scheme to its customers. Apply for a home loan today to fulfil your dream of owning a house.