All You Need to Know About Pradhan Mantri Awas Yojana

The initiative was undertaken by the central government to provide sustainable and affordable housing solutions to lower-income groups, middle-income groups, and economically weaker sections.

Real estate inflation has been on the rise for over a couple of decades, which has resulted in sky-rocketing property and land prices. The PMAY helps the lower and middle-income groups' dream of owning a house come true. The scheme focuses on building more houses by using eco-friendly materials for construction so as to ensure minimum damage to the environment and result in less air and sound pollution. Under this mission, a Credit Linked Subsidy Scheme was introduced to provide interest subsidies on loans availed for the purchase, construction, extension, or improvement of a house. This subsidy is credited upfront to the beneficiary on the principal amount, which will result in bringing down effective home loans and EMI. Notably, the subsidy amount under the scheme largely depends upon the income category that the borrower belongs to and the size of the property being financed.

Pradhan Mantri Awas Yojana - Urban:

PMAY-U is operated by the Ministry of Housing and Urban Affairs and is responsible for providing affordable houses in urban areas of India. The scheme covers the areas under the jurisdiction of an urban development authority, special area development authority, planning or development authority, industrial development authority, and any other authority under a state government.

Pradhan Mantri Awas Yojana - Rural:

PMAY-R was earlier known as India Awas Yojana and was revamped in March 2016. It is operated by the Ministry of Rural Development and is responsible for providing affordable houses in rural areas of India. Delhi and Chandigarh are exempted from the scheme. The primary objective of the scheme is to provide pucca houses to the homeless and those living in dilapidated and kutcha ones. For the plain areas, the central and respective state governments share financial assistance in a ratio of 60:40 and the same for special category states it is 90:10. The scheme ensures that every house constructed has basic facilities like toilet, LPG gas, electricity, piped drinking water, and other essential facilities.

What are the four components of the PMAY?

1. Credit Linked Subsidy Scheme:

Credit Linked Subsidy Scheme, also known as CLSS, is a primary component of the Pradhan Mantri Awas Yojana. The objective of the scheme is to provide subsidies on home loan interest. The subsidy available to the beneficiaries based on the income class is as below:

2. Slum Re-development:

The slum re-development component of the scheme aims at redeveloping slums using land as a resource in partnership with a private organisation. The centre determines the prices of the houses, and the respective state government or union territory decides the beneficiary contribution (if any).

3. Affordable Housing in Partnership:

Under the scheme, the government provides financial assistance of Rs 1.5 Lakh to the families that come under the Economically Weaker Section for the purchase of houses. In order to develop the projects, the states and union territories can come under a partnership with the private sector. Individuals with physical disabilities, senior citizens, SCs and STs, and other vulnerable sections of society are preferred in the allotment.

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4. Subsidiary for Beneficiary-led Construction or Enhancement:

The scheme aims to financially assist the Economically Weaker Section families in the construction of the new house or the enhancement of the existing house. The EWS families can get a benefit of Rs 1.5 Lakh from the central government under the scheme.

What are the eligibility criteria for the PMAY?

PMAY is further categorised into three different schemes based on the individual's income, position in the economic strata, and housing needs:

1. Under EWS/ LIG Scheme:

(Under Economically Weaker Section or Low Income Group Scheme under PMAY)

• Your household income has to be up to Rs 3 Lakhs per annum for EWS.

• Your income has to be up to Rs 6 Lakhs per annum for LIG.

• As an EWS beneficiary, you can choose a carpet area of 30 sq. mts. Whereas, as a LIG beneficiary, you can choose a carpet area of 60 sq. mts. The carpet area is counted as any floor space within the house, excluding external walls but including internal partition walls.

• Your age should be less than 70 years at the end of the repayment period, and the maximum repayment tenure of the loan is 20 years.

2. Under CLSS (MIG-I) Scheme:

(Under Credit Linked Subsidy Scheme for Middle Income Group - I Scheme under PMAY)

• Your household income has to be in the range of Rs 6 Lakh to Rs 12 Lakhs.

• The subsidy of 4% can be applied to up to Rs 9 Lakhs only. In case of a higher loan amount, the excess amount will not be linked to the subsidy.

• The total carpet area of the house, excluding external walls and including internal partition walls, should be up to 120 sq. mts.

• Although the loan term remains 20 years, the banks can sanction the loan for up to 30 years if the borrower's age is less than 70 years at the end of the repayment term.

• The home loan EMI should not be more than 50% of the borrower's gross income.

3. Under CLSS (MIG-II) Scheme:

(Under Credit Linked Subsidy for Middle Income Group - II Scheme under PMAY)

• Your household income has to be in the range of Rs 12 Lakhs to Rs 18 Lakhs.

• The subsidy of 3% can be applied to up to Rs 12 Lakhs only. In case of a higher loan amount, the excess amount will not be linked to the subsidy.

• Although the loan term remains 20 years, the banks can sanction the loan for up to 30 years if the borrower's age is less than 70 years at the end of the repayment term.

Can anyone apply for the PMAY?

• You can apply for the PMAY if you fulfil the eligibility criteria and your city is listed on the central government's approved list of PM Yojana, which has 4304 cities across 35 states and union territories in India where PMAY urban is valid. You can check if your city is listed on the official website of the Ministry of Housing and Urban Affairs.

• You should not own a pucca house under your or any other family member's name.

• You should not have availed go the benefits of any other government-sponsored housing scheme.

How to apply for a Pradhan Mantri Awas Yojana?

You can apply for PMAY online or offline. For offline application, you are required to visit any branch of the PMAY listed bank. You will be asked to fill up the form and submit the necessary documents, such as your identity proof, address proof, income proof, etc. Please note that Aadhar Card is a mandatory requirement to avail of the benefits of the PMAY. Once your application is approved, you can choose the property and finalise the purchase deal at a subsidised interest rate.

Whereas, for online application, you need to follow the below process:

• Sign up on the official PMAY website

• Click on 'Citizen Assessment'

• Click on 'Benefits under other 3 Components'

• Enter your Aadhar number in the provided box and click on 'Check'

• You will be redirected to a PMAY application form

• Fill in all the details accurately, such as your personal details, bank details, income details, etc.

• Check the box agreeing to the terms and conditions, enter the security captcha, and click on 'Save'

• You will receive an application number, which you can use for your reference to track the application on the PMAY portal

Warm Regards,
Ketki Jadhav
Content Writer