Pradhan Mantri Awas Yojana (PMAY)

Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme

Pradhan Mantri Awas Yojana (PMAY)

In order to empower people to get their dream home, honorable Prime Minister has announced a comprehensive and a progressive mission, 'Pradhan Mantri Awas Yojana – Housing for All' on 17 June, 2015.

One of the major verticals of Pradhan Mantri Awas Yojana (PMAY) is Credit Linked Subsidy Scheme (CLSS) for Lower Income Group/Economically Weaker Section (EWS/LIG) and Middle Income Group (MIG – I & II). Under this scheme, Central government provides financial assistance through lending Institutions to eligible beneficiaries across all statutory towns as per 2011 census and their adjacent planning area (updated by the government from time to time)

The interest subsidy is channelized through two central nodal agencies - National Housing Bank (NHB) and Housing & Urban Development Corporation (HUDCO). The apex government bodies channelize subsidy to the lending institutions and they help the eligible applicants to avail subsidy.

IIFL Home Loans is an approved lender, and loan applications which meet eligibility criteria for CLSS subsidy are forwarded to National Housing Bank (NHB) for approval. An applicant can avail maximum interest subsidy of up to Rs 2.67 lacs*. Central government provides interest subsidy which is credited to eligible beneficiary’s loan account. Hence, a beneficiary receiving subsidy of Rs. 2.67 lac* on a loan amount of Rs. 20 lac for a tenure of 20 years, at interest rate of 8.70% actually gets loan a home loan at an effective rate of 6.79%.

IIFL Home Loans has been helping beneficiaries to avail this subsidy across the country.

Credit Linked Subsidy Scheme

EWS and LIG households/families, whose annual household income is up to Rs 6 lakh are eligible to avail subsidy under this scheme; The ‘family’ must not own a pucca house in any part of India. Subsidy credited upfront to the loan account of beneficiary resulting in reduced effective housing loan and EMI.

Features of CLSS

  • The maximum subsidy is up to Rs. 2.67 Lakhs*
  • Interest subsidy at a rate of 6.5%* for a tenure of 20 years or tenure of loan, whichever is lower
  • Subsidy available only for loan amounts upto Rs 6 lakh and additional loans beyond Rs 6 lakh, if any will be at non subsidized rate
  • Aadhar card is mandatory for applying for this scheme

Beneficiaries under Pradhan Mantri Awas Yojana (PMAY)

The Pradhan Mantri Awas Yojana (PMAY) was introduced in June 2015 to provide affordable housing to the urban poor with a target of building 2cr affordable houses by March 2022. The PMAY has 2 components i.e. PMAY-U for the urban poor and PMAY-G for the rural poor. This PMAY is linked to other schemes to ensure houses have a toilet, electricity connection, LPG gas connection, access to drinking water and Jan Dhan banking facilities. A total of 1cr homes had been approved till December 2019.

Beneficiaries under the PMAY

  • PMAY Beneficiary family will comprise husband, wife, unmarried sons and unmarried daughters
  • The condition is that such beneficiary family should not own a pucca house in the name of any of the members in any part of India

How are PMAY beneficiaries identified and selected?

Pradhan Mantri Awas Yojana (PMAY) scheme caters mainly to the housing needs of the urban and rural poor. This includes slum dwellers residing in confined areas with inadequate infrastructure, poor sanitation and absence of clean drinking water.

Beneficiaries are of 3 types i.e. Middle Income Groups (MIGs), Low Income Groups (LIGs) and Economically Weaker Section (EWS). The annual income for EWS category beneficiaries is capped at Rs3 lakh, but it can go up to Rs18 lakhs for MIG.

Beneficiaries from EWS category are eligible for complete assistance under PMAY while beneficiaries from LIG and MIG categories are only eligible for Credit Linked Subsidy Scheme. LIG / EWS beneficiaries must submit an affidavit as income proof to the authority.

How to Apply for Pradhan Mantri Awas Yojana (PMAY) Online?

The best way to apply for the PMAY is to use the online application process as it is simple & convenient and saves time. Ensure to keep your bank account, household income and Aadhar details handy when you make the application. This can save a lot of time.

Steps to apply for Pradhan Mantri Awas Yojana (PMAY) online

Start your PMAY journey by visiting the official website of the PMAY as under:

  • On the website, click on the "Citizen Assessment" menu as under.

  • Select whether you belong to EWS / LIGH / MIG or slum dweller category. Then enter your 12-digit Aadhaar card number which will redirect to the application page.
  • Fill your personal details, income, residential address and bank account details in the application page.
  • After filling the application, tick the "I am aware" option at the end of the page and click "Save" button
  • Now, you will see a system generated application number which you must save for future reference and print the duly-filled application.
  • Submit the form at nearest CSC office with the required documents

Some preparatory steps in the process

Before filing the PMAY application, make sure to check your eligibility and that your name is listed in the beneficiary list. You can submit your BPL certificate to the lending institution and they will notify you if you are eligible for PMAY. You can also check the list of beneficiaries online by visiting the official website. Make sure to check the updated list. These preparatory steps will make the application process smoother.

How Does PMAY Work Through the Borrower's Bank?

The process for the borrowing bank to disburse the loan under PMAY is quite simple. Here are the key steps involved.

Key steps to get the interest rate subsidy under PMAY

  • Apply for a home loan from any of the listed lending institutions asking for subsidy
  • The lending institution will review your application and, if eligible, your application will be sent to the Central Nodal Agency
  • If your application has not discrepancies, it is verified and approved and the Central Nodal Agency will disburse the subsidy amount to the lending institution
  • This amount is credited to your account by the lending institution which will lower your total loan amount.
  • You can continue paying the EMIs towards the balance loan amount.

Calculating the EMI on the PMAY

Pradhan Mantri Awas Yojana scheme aims to simplify the process of purchasing a home for the urban poor and weaker sections of society through EMIs at reasonable rates of interest. The rate of interest is much lesser than commercial rates, thus offering subsidised loans.

To calculate EMI log on to the PMAY website as under

Then fill the following details

  • Total loan amount in rupees
  • Rate of interest
  • Total loan period in months

Once the following details are submitted, click on the "Calculate" option to get subsidy amount and the EMI payable.

Pradhan Mantri Awas Yojana - FAQs

Adult female membership is required in property structure. In case of absence of an adult female member in a household, the property can be registered in the name of a male member only.

  • For EWS/LIG - Husband, Wife and unmarried children constitute household/Beneficiary Family
  • For MIG - Husband, wife and unmarried children
  • An adult earning member (irrespective of its marital status be considered as separate household)

Following documents need to be submitted to the branch officer as per IIHFL Credit Policy. The list of documents is mentioned below:

  • Aadhaar of all household members
  • Notarized Affidavit cum Undertaking is mandatory

As the household does not own a Pucca house, he can apply for subsidy under the scheme subject to additional qualifiers such as annual household income, property in urban/adjacent area etc.

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