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Pradhan Mantri Awas Yojana

This central government initiative has the rallying cry of ‘housing for all by 2022. Something of this scale and sweep necessarily involves partnering with various implementing agencies. As for beneficiaries, there are clear eligibility criteria and processes for getting the loan which they should be aware of.

Pradhan Mantri Awas Yojana (PMAY) comprises four key aspects.

One, it aims to transform slum areas by building homes for slum dwellers in collaboration with private developers.

Two, it plans to give credit-linked subsidy to middle income group (MIG) on loans taken for new construction or renovation of existing homes.

Three, the government will chip in with financial assistance for affordable housing projects in partnership with states/union territories for the economically weaker sections (EWS).

Four, there is subsidy for beneficiary-led individual house construction/enhancement. The government will extend direct financial assistance to EWS.

Launched in June 2015, PMAY provides central assistance to urban local bodies (ULBs) and other implementing agencies through states/UTs. As of 25 April 2016, the government has identified 2,508 cities and towns in 26 states for beginning construction of houses for the urban poor. What will be built under the scheme are affordable pucca houses with water facility, sanitation and electricity supply round the clock.

If you are looking to own a home of your own under the Pradhan Mantri Awas Yojana- Urban (PMAY-U) scheme, there is still time for you to arrange the amount for down payment, zero in on the location and builder, etc. The government has extended the period to avail the credit-linked subsidy scheme (CLSS) on home loans for middle income group (MIG) from 31 December 2017 to 31 March 2019.

Before it is too late, let’s try to understand the scheme.

Eligibility for availing loan under Pradhan Mantri Awas Yojana
  • This scheme is available for individuals only.
  • The beneficiary family should not own a pucca house and the beneficiary family should not have availed of central assistance under any housing scheme from Government of India.
  • A beneficiary family will comprise of husband, wife, unmarried sons and/or unmarried daughters. To avoid duplication, beneficiary family members have to provide their Aadhaar numbers while applying for the loan.
  • Age of all applicants should be above 18 years. The maximum age does not extend beyond the retirement age or 60 years (70 years for self-employed individuals).
  • Annual combined income of all applicants: The maximum declared/assessed income should be up to Rs 6 lakh for EWS and LIG category, Rs 6.01 lakh to Rs 12 lakh for MIG-1, and Rs 12.01 lakh to Rs.18 lakh for MIG-2.
  • Renovation/extension should be used to convert kuccha house into a pucca house.
  • Under the scheme, widows, single working women, persons belonging to SC/ST and OBC, the differently abled and transgender persons will be given preference.

 

Other for requirements  PM Awas Yojana
  • Aadhaar/PAN is mandatory for all family members as mentioned in the declaration for household income.
  • In case of sub-product renovation/extension, carpet area for the completed property should not be more than 30 square metres and 60 square metres for EWS and LIG, respectively. Carpet area for the completed property should not be more than 120 square metres and 150 square metres for MIG-1 and MIG-2, respectively. Financial institutions can recall the subsidy if the property remains incomplete within 36 months from the date of the first disbursement.
  • The houses given under this scheme will be owned by females or jointly with males.

 

Features and Benefits of PMAY

  • Loan amount: Individuals in EWS and LIG categories can avail a home loan of up to Rs 25 lakh including insurance, and those in MIG can avail a home loan of up to Rs 140 lakh including insurance (minimum loan amount Rs 50,000 excluding insurance).
  • Tenure and term: The tenure of your home loan will range from 1 year to 30 years. The term, however, does not extend beyond the retirement age or 60 years, whichever is earlier (70 years for self-employed individuals).
  • Purpose: Credit-linked subsidy will be available for housing loans availed for new/resale purchase of home and construction loan for all segments. Additionally, for EWS/LIG, extension/improvement of rooms, kitchen, toilet, etc., to existing dwelling can be done.
  • Interest subsidy: For EWS and LIG, the credit-linked subsidy will be available only for loan amounts up to Rs 6 lakh and such loans will be eligible for an interest subsidy at the rate of 6.50 per cent p.a. (Rs 2.67 lakh approximately), for a tenure of 20 years or during the tenure of loan, whichever is lower, to eligible customers under the scheme. For MIG-1 customers, subsidy will be applicable for loan amounts up to Rs 9 lakh and such loans will be eligible for an interest subsidy at the rate of 4 per cent p.a. for a tenure of 20 years. For MIG-2 customers, subsidy will be available for loan amounts up to Rs 12 lakh and such loans will be eligible for an interest subsidy at the rate of 3 per cent p.a. for a tenure of 20 years.
  • Processing fee: Nil (Processing fee on loan amount as per maximum subsidy applicable [as per customer applicability] to be refunded once claim is received from National Housing Bank, or NHB.)
  • Easy repayments: You have two options for repayment of the loan based on the EMIs payable on your home loan.
  1. Through ECS (electronic clearing service) based on standing instructions to your bank
  2. Thought postdated cheques (PDCs) drawn on your savings/salary account
  • Tax benefits: Resident Indians are eligible for certain tax benefits on principal and interest components of a home loan. As per Income Tax Act 1961 rules, the current applicable exemption under Section 24(b) is Rs 200,000 for the interest amount paid in the financial year, and up to Rs 150,000 (under Section 80C) for the principal amount repaid in the same year.
  • Applicant and co-applicant: Home loans can be applied for by an individual. The loan amount can be further enhanced by including an earning co-applicant. Female property ownership is mandatory for EWS/LIG category but not so for MIG category.

Disbursing agencies: The Housing and Urban Development Corporation (HUDCO) and National Housing Bank (NHB) have been identified as central nodal agencies to channelise the subsidy to the lending institutions, including banks and financial institutions. Hence, small banks, non-banking financial companies and microfinance institutions have also been recognised as primary lending institutions under the scheme.

Illustration

House value (A) – Rs 3,500,000

Home loan amount (B) – Rs 2,400,000 (70% of the value)

PMAY subsidy (C) – Rs 230,167

Net loan amount (B-C) – Rs 2,169,844

CLSS Toll-Free Helpline Numbers

NHB: 1800-11-3377

1800-11-3388

HUDCO: 1800-11-6163

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