To make the home purchase affordable for the poor, the government has launched Pradhan Mantri Awas Yojana (PMAY). It is a housing scheme that provides interest subsidy benefits on the home loan amount to the beneficiaries. Read on to know more about PMAY.
For most middle-class families, buying a new home with their savings is nearly impossible. They rely on a home loan to get the necessary funds. If you plan to avail of a home loan, you must know that it is a big responsibility and repaying the home loan requires a long-term commitment.
Since 2015, with the launch of the Pradhan Mantri Awas Yojana, an affordable housing scheme, many home loan borrowers have benefitted from it. Under the scheme, the government aims to reduce the financial burden of home loan repayment for lower-income groups by subsidizing the home loan interest rate. However, to avail of the PMAY subsidy benefits, you must meet specific eligibility criteria.
Eligibility Criteria of the PMAY
To provide maximum subsidy benefits to the home loan applicants, the government has categorised them into four different categories based on their annual household income. The eligibility and interest subsidy percentage vary depending on the income category you belong to.
Economically Weaker Section (EWS)
- The annual household income for EWS applicants must be up to Rs. 3 Lakhs.
- The interest subsidy they can receive is 6.5%.
- The maximum loan tenure they can apply for is 20 years.
- The maximum carpet area for the house they want to purchase is 60 Sq. Mt.
Low Income Group (LIG)
- For LIG applicants, the annual household income must be up to Rs. 6 Lakhs.
- The interest subsidy they can receive is 6.5%.
- The maximum loan tenure they can apply for is 20 years.
- For LIG applicants, the maximum carpet area for a home they want to buy is 60 Sq. Mt.
Middle Income Group I (MIG I)
- Applicants with annual household income up to Rs. 12 Lakhs fall under the MIG I category.
- They can receive an interest subsidy of 4%.
- The maximum loan tenure for them is 20 years.
- The maximum carpet area for MIG I applicants is 160 Sq. Mt.
Middle Income Group II (MIG II)
- People who have an annual household income up to Rs. 18 Lakhs fall under this category.
- They are allowed to receive an interest subsidy of 3%.
- The maximum loan tenure for MIG II applicants is 20 years.
- For MIG II applicants, the maximum carpet area is 200 Sq. Mt.
The applicant should meet a few other eligibility requirements like-
- The applicant or any of his/her family members shouldn’t own a house in the country.
- The applicant or any of his/her family members should not have availed financial assistance from any other government housing scheme.
- In the case of a married couple, the applicants can apply for joint ownership. However, the couple will only receive a single subsidy.
The PMAY makes it easier for first-time homebuyers to buy a house. Thus, every home buyer should understand the requirements of PMAY and avail of its benefit.