Buying a house under one’s name is the number one goal in almost every person’s list of ambitions. However, the affordability for this always remains a question or a problem rather. But thanks to the Pradhan Mantri Awas Yojana, we might be able to get this aim off our bucket list soon. Urban poverty, whether we know about it or irrespective of which city we live in, has become a problem faced by all city dwellers. In such a case, being able to buy a house has become even more difficult. Yes, there are home loans available but even those aren’t enough most of the times. Hence, the Pradhan Mantri Awas Yojana is a blessing for most urban dwellers.
Do you know about this scheme though? It has been spoken about and covered in various media forms. But the knowledge about the Pradhan Mantri Awas Yojana is still incomplete for many. If you’re looking for information and details on Pradhan Mantri Awas Yojana, we’re here to help.
Let’s first begin with understanding which income groups fall under the Pradhan Mantri Awas Yojana. The Credit Linked Subsidy Scheme (CLSS) for Middle Income Group (MIG) has divided the group into CLSS for MIG I and MIG II. Under this, the middle-income earners comprise of two slabs which include the Middle Income Group (MIG) – I with households earning an annual income between Rs.6,00,001 up to Rs.12,00,000; and, the Middle Income Group (MIG) – II earning an annual income between Rs.12, 00,001 up to Rs.18, 00,000.
Therefore, anyone with an income between Rs 6 lakh and Rs 18 lakh per annum will be able to avail the benefits of subsidized loans. However, there are a few other conditions involved here. The first condition being that of eligibility. So, who all are eligible to reap the benefits of Pradhan Mantri Awas Yojana?
Aimed primarily at providing household to all, understandably anyone who already owns a home or if any of their family members own a home are immediately excluded from the benefits. The scheme states that:
“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.”
Now, what or who is the beneficiary family? This includes a husband, wife, unmarried sons and/or unmarried daughters. To avoid duplication, during loan application, it is mandatory for the beneficiary members to provide their Aadhaar card numbers. To make it easier for adult members in the MIG, the guidelines also specify that:
“An adult earning member (irrespective of marital status) can be treated as a separate household, provided that he/she does not own a pucca (an all weather dwelling unit) house in his / her name in any part of India.”
Hence, an adult staying with his/her parents, wanting to buy another house under his name, and falling under the MIG 1 or MIG II groups as per their income, can opt for PMAY provided they don’t own any other home. In case the adult children are married and wish to avail PMAY benefits, they will be eligible for a single house, bought by either of the spouses or together in joint ownership, irrespective of whether their parents own a home or not.
Let’s now try to understand the subsidy and interest involved in buying a home through Pradhan Mantri Awas Yojana. For those falling under the MIG I group, the loan subsidy would be 4% on a loan amount up to Rs. 9 lakh. For the MIG II group, this will be 3% on a loan amount up to Rs. 12 lakh. Here’s an example of the detailed calculation and derivation of the interest and subsidy.
If you already own a home and want to upgrade to a better one, even then you can avail the benefits of Pradhan Mantri Awas Yojana. The government already made it the clear that the Mission (Housing for All by 2022) also provides for enhancements and incremental housing to the existing ‘pucca’ house. So, home loan providers cannot reject an applicant who seeks for a home loan for adding a room, kitchen etc to his/her current dwellings.
So, the question now remaining to be answered is, where does one apply for such loans? Well, all those falling under the MIG I and MIG II groups can avail PMAY linked loans from any primary lending institutions including scheduled commercial banks, housing finance companies, Regional Rural Banks, State Cooperative Banks, Urban Cooperative Banks, Small Finance Banks, Non Banking Financial Company etc.
