Pradhan Mantri Awas Yojana is a government of India initiative which was launched in 2015 to provide affordable housing for all. PMAY is converged with other schemes to build houses for the urban poor including low-income groups (LIG), economically weaker sections (EWS), middle-income group (MIG). The purpose of merging this scheme with the other scheme is to ensure every home has access to drinking water, a toilet, Ujjwala Yojana LPG gas connection, Saubhagya Yojana electricity connection, and Jan Dhan banking facilities.
Given below are the benefits of this scheme and eligibility, along with the process to avail it.
Features & Benefits of Pradhan Mantri Awas Yojana
This scheme aims at providing affordable housing by the year 2022. The government provides an interest subsidy of 6.5% on housing loans for the beneficiary for 20 years under CLSS (Credit Link Subsidy Scheme). The houses constructed under this scheme are eco-friendly. Preference is given to the senior citizens and differently abled citizens while allotting ground floors. The interest subsidy is provided on housing loans for construction, improvement, extension, and acquisition of houses for the MIG-I, MIG-II, LIG, and EWS.
The maximum subsidy beneficiaries can receive is up to Rs.2.67 lakh. This subsidy is applicable for loan amount up to Rs.6 lakh; over which loans will be available at a non-subsidized rate. For MIG-I group, the interest subsidy can be availed at 4%* on home loans up to Rs.9 lakhs, and 3%* on home loans up to Rs.12 lakh for MIG-II.
(*discounting rate 9%)
Types of Pradhan Mantri Awas Yojana
This scheme has two components: Pradhan Mantri Awas Yojana Urban (PMAY-U) and Pradhan Mantri Awas Yojana Gramin (PMAY-G or PMAY-R). The scheme is implemented through 4 verticals namely ‘In situ’ sum redevelopment, affordable housing through CLSS, affordable housing in partnership, and subsidy for beneficiary-led individual house construction.
Pradhan Mantri Awas Yojana Eligibility
Beneficiaries must be less than 70 years of age to be eligible to avail this loan. Also, the houses given under this scheme will be owned by women or jointly with men. A beneficiary family comprises of wife, husband, unmarried sons and/ or unmarried daughters. Irrespective of their marital status, an adult earing member is treated as a separate household in the MIG category. Beneficiaries should not own any ‘pucca’ house in their name or in the name of any member of the family in any part of the country. Applicants with an annual income between Rs.6-12 lakh fall under the MIG-I, and Rs.12-18 lakh under MIG-II.
PMAY Eligibility Categories
EWS (Economically Weaker Section)
Applicants with an annual income of less than Rs.3 lakh are eligible to avail subsidy under EWS.
LIG (Low Income Groups)
Applicants with an annual income between Rs.3-6 lakh will be listed in the Pradhan Mantri Awas Yojana list.
MIG-I (Medium Income Group-1)
Applicants with an annual household income less than Rs.12 lakh fall under this category. These applicants can avail loans of up to Rs.9 lakh for the construction of a residence.
MIG-II (Medium Income Group-2)
Applicants with an annual household income between Rs.12-18 lakh fall under this category. These applicants can avail loans of up to Rs.12 lakh.
Those hailing from SC/ ST/ OBC fall under this category.
Women belonging to the EWS or LIG category are considered for the Pradhan Mantri Awas Yojana list 2019.
Relevant proof needs to be furnished to the government to ascertain the claims for those belonging to EWS, LIG, MIG-I, MIG-II, and minorities.
Here is a table displaying the applicable interest subsidy and the loan amount for the various categories under the PMAY-CLSS:
|Eligibility family income (Rs.)||Up to Rs.3 lakh||Between Rs.3 lakh to Rs.6 lakh||Between Rs.12 lakh to Rs.18 lakh||Between Rs.6 lakh to Rs.12 lakh|
|Maximum carpet area (sq. m.)||30||60||160||200|
|Subsidy calculated on eth maximum loan of (Rs.)||6,00,000||6,00,000||9,00,000||12,00,000|
|Interest subsidy (%)||6.50||6.50||4.00||3.00|
|Maximum subsidy (Rs.)||2.67 lakh||2.67 lakh||2.35 lakh||2.30 lakh|
|Validity of the scheme||31st March 2022||31st March 2022||31st March 2019||31st March 2019|
|Woman ownership||Mandatory||Mandatory||Not mandatory||Not mandatory|
The Process to Avail Subsidy
As mentioned above, applicants must have their relevant documents to prove which category they fall under before availing the subsidy under Pradhan Mantri Yojana. Submit the request in any financial institution. The institution will then review the request for the subsidy and will submit the claim to the National Housing Bank. Subsidies are subject to the clearance and approval from the National Housing Bank. Here is the procedure to avail the subsidy:
- Download the self-declaration form by clicking on the link provided by the financial institution.
- Submit the duly filled self-declaration form to the financial institution.
- Produce the original ID proof. Also, furnish the Aadhar cards of all the family members as Aadhar is mandatory to avail the subsidy.
Please make sure that all the details provided in the self-declaration form are accurate. Also, the signature of applicants and co-applicants (wherever applicable) is needed on the self-declaration form.
Frequently Asked Questions about PMAY
How is the loan eligibility assessed?
The loan eligibility is assessed based on the internal guidelines and processes of the bank which are amended regularly. For the purpose of eligibility assessment, applicants need to submit documents like ITR, documents slip, existing loan details, and bank statement.
Is PM Awas Yojana subsidy available for salaried applicants?
Yes, this scheme is available for both salaried as well as self-employed customers.
What is the maximum tenure on which the scheme is applicable?
The scheme is applicable for a maximum tenure of 20 years.
What are the income eligibility criteria for various categories?
Here are the income norms:
a) EWS individuals or households with an annual income of up to Rs.3 lakh.
- b) LIG individuals or households with an annual income of MORE THAN Rs.3 lakh and up to Rs.6 lakh.
- c) MIG-I individuals or households with an annual income of more than Rs.6 lakh and up to Rs.12 lakh.
- d) MIG-II individuals or households with an annual income of more than Rs.12 lakh and up to Rs.18 lakh.
Are there any additional eligibility criteria apart from income and not owning a pucca house?
The property on which the subsidy is to be availed needs to have basic amenities like sanitation, water, sewerage, electricity, and road.
When was the PMAY-CLSS scheme launched?
PMAY-CLSS was launched by the government in January 2017 for the middle-income groups.
What is the size unit under the CLSS scheme under PMAY?
The carpet area of the houses being constructed under this scheme must be up to 60 sq. m. for LIG category 30 sq. m. for EWS category. But the beneficiary can construct a bigger house.
Can those with a small business also avail a home loan under Pradhan Mantri Awas Yojana?
Yes, those having a small business can also avail a home loan under this scheme, subject to meeting the income and other criteria.
Is it compulsory to get the Aadhar card details for all the members of the applicant’s family?
Yes, it is mandatory to furnish the Aadhar card details of all the family members for processing the subsidy under the Awas Yojana CLSS for MIG-I and MIG-II.
Who can avail the Pradhan Mantri Awas Yojana?
This scheme is provided to the applicants belonging to the EWS (Economical Weaker Section), LIG (Lower Income Group), and MIG- (Middle Income Group) for the construction, purchase, improvement, and extension of the house.
Under this scheme, who are the beneficiaries defined as?
- a) A family compromising of wife, husband, and unmarried children.
- b) An unmarried individual earning member of the family (only for the MIG scheme).
- c) Applicants with no pucca house wither in their name or in the name of any member of the family in part of the country.
- d) Applicants who haven’t received any assistance by the center under the CLSS.
- e) Applicants who meet the income norms as defined by the categories.
How do beneficiaries receive the interest subsidy under the Pradhan Mantri Awas Yojana?
The financial institution claims the subsidy for the eligible beneficiaries from NHB (National Housing Bank). NHB conducts due diligence to exclude claims where applicants have submitted multiple requests. The subsidy amount is paid to the financial institution for all eligible borrowers. This interest subsidy is credited upfront to the loan amount once the financial institution receives it. The subsidy is calculated on Net Present Value (NPV) at 9% discount rate.
How does this scheme affect EMI?
Beneficiaries have to pay EMIs on the reduced loan amount due to the interest subsidy. For example, if the applicant avails a loan of Rs.8 lakhs; the subsidy works out to be Rs.2.2 lakh. This Rs.2.2 lakh is deducted upfront from the loan amount of Rs.8 lakh. Therefore, the loan reduces to Rs.5.8 lakh. Subsequently, the borrower now would pay EMI on Rs.5.8 lakh instead of Rs.8 lakh.