In an aim to provide affordable housing to Indian citizens in every part of the country, the PMAY scheme was launched in 2015. Furthermore, to address the acute housing problem faced by rural India, the Indira Awas Yojana was restructured to form Pradhan Mantri Awas Yojana- Gramin.
The scheme aims to provide financial aid to eligible households for the construction of a pucca house with all amenities such as toilet, electricity connection, LPG gas connection, and clean water supply. Apart from these basic amenities, homes constructed under this scheme must meet all the safety requirements against natural disasters such as flood, earthquake, cyclone, landslides etc.
The Pradhan Mantri Awas Yojana addresses the acute issue of housing requirements in India via its four main components. These are as follows –
- Collaboration with the private and public sector –
States and union territories can collaborate with the private sector to plan affordable housing projects. Such projects will be eligible for a financial grant of up to Rs.1.5 lakh per house for economically weaker sections.
- Slum redevelopment –
This component of the scheme focuses on acquiring lands to construct houses with private participation for slum dwellers. In this case, land acquired may be privately owned, or belong to the Central Government/State Government.
The scheme under Pradhan Mantri Awas Yojana will extend financial aid of Rs.1 lakh per house constructed for eligible slum dwellers under this component.
- Subsidy for house construction for individual eligible families –
Under this component, financial aid will be offered to individual families for the construction or renovation of houses. However, benefits under this component will only be provided to those individuals or families who are not eligible to avail any other benefits under Pradhan Mantri Awas Yojana.
Beneficiaries under this scheme can opt for financial aid of up to Rs.1.5 lakh for home construction. However, to avail the assistance, they need to be a part of HFAPoA (Housing for All Plan of Action).
- Credit linked subsidy scheme
It is one of the main components of PM Awas Yojana. Under this component, individuals can avail subsidy on home loans for construction and extension of houses. While this component was first introduced for households in EWS and LIG category, facilities offered under this scheme have been extended to families or individuals from the middle-income group as well since 2017. It has been done so to encourage them to purchase property at affordable rates and boost the real-estate sector.
The loan amount that can be availed and subsidy offered will vary based on an individual’s income group. However, before you apply for PMAY, know the PMAY eligibility criteria here.
- Economically Weaker Section
Families with an annual income of up to Rs.3 lakh are identified under this group. They can avail a subsidy of 6.50% on a loan of up to Rs.6 lakhs.
- Lower Income Group
Individuals with an annual earning of up to Rs.6 lakh can avail an interest subsidy of 6.50% on loans of up to Rs.6 lakhs
- Middle Income Group-I
Families with income group between Rs.6 lakh to Rs.12 lakh are eligible for interest subsidy of 4% of credits up to Rs.9 lakh
- Middle Income Group-II
Households with income between Rs.12 lakhs to Rs.18 lakh can opt for an interest subsidy of 3% on home loans of up to Rs.12 lakh.
Application procedure
One can apply for PMAY via online as well as offline mode. To apply online, one can follow the steps below –
- Visit the official Website of Pradhan Mantri Awas Yojana.
- Select the citizen assessment option from the top of the website.
- Provide your Aadhaar number.
- Enter all required details in the application form page.
- Take a print out and submit the same at the Common Services Centre (CSC).
Borrowers can also apply offline under PMAY by directly visiting their nearest Common Services Centre.
Alternatively, individuals can apply for a home loan under Pradhan Mantri Awas Yojana through a financial institution. Some of the NBFCs providing financing under this scheme also extend pre-approved offers to borrowers for hassle-free and quick processing of loan applications.
Such offers can be availed on an array of credit products such as loans against property, home loans, etc. One can easily check his/her pre-approved offers by entering simple information like name and contact information.
However, before applying for a home loan with any NBFC, one should carry out comprehensive research on lenders and compare associated fees and interest rate. They can also use online tools like home loan EMI calculator to know how much home loan EMI you can afford and apply accordingly.
