Almost every Indian dreams of having his or her own home. If you are among them and you aren’t able to afford one till date, then you should know of Pradhan Mantri Awas Yojna home loan assistance scheme which will make your dream of owning a home in an urban area possible. This scheme was earlier known as Housing for all and is an initiative of Prime Minister Narendra Modi.
This central government initiative has the rallying cry of ‘Housing for all by 2022’. Something of this scale and sweep necessarily involves partnering with various implementing agencies. As for beneficiaries, there are clear eligibility criteria and processes for getting the loan which they should be aware of.
✓ One, it aims to transform slum areas by building homes for slum dwellers in collaboration with private developers.
✓ Two, it plans to give credit-linked subsidy to middle income group (MIG) on loans taken for new construction or renovation of existing homes.
✓ Three, the government will chip in with financial assistance for affordable housing projects in partnership with states/union territories for the economically weaker sections (EWS).
✓ Four, there is subsidy for beneficiary-led individual house construction/enhancement. The government will extend direct financial assistance to EWS.
- Loan Amount
Individuals in EWS and LIG categories can avail a home loan of up to Rs 25 lakh including insurance, and those in MIG can avail a home loan of up to Rs 140 lakh including insurance (minimum loan amount Rs 50,000 excluding insurance).
- Tenure and term
The tenure of your home loan will range from 1 year to 30 years. The term, however, does not extend beyond the retirement age or 60 years, whichever is earlier (70 years for self-employed individuals).
Credit-linked subsidy will be available for housing loans availed for new/resale purchase of home and construction loan for all segments. Additionally, for EWS/LIG, extension/improvement of rooms, kitchen, toilet, etc., to existing dwelling can be done.
- Interest Subsidy
For EWS and LIG, the credit-linked subsidy will be available only for loan amounts up to Rs 6 lakh and such loans will be eligible for an interest subsidy at the rate of 6.50 per cent p.a. (Rs 2.67 lakh approximately), for a tenure of 20 years or during the tenure of loan, whichever is lower, to eligible customers under the scheme. For MIG-1 customers, subsidy will be applicable for loan amounts up to Rs 9 lakh and such loans will be eligible for an interest subsidy at the rate of 4 per cent p.a. for a tenure of 20 years. For MIG-2 customers, subsidy will be available for loan amounts up to Rs 12 lakh and such loans will be eligible for an interest subsidy at the rate of 3 per cent p.a. for a tenure of 20 years.
- Processing Fee
Nil (Processing fee on loan amount as per maximum subsidy applicable [as per customer applicability] to be refunded once claim is received from National Housing Bank, or NHB.)
- Easy Repayments
You have two options for repayment of the loan based on the EMIs payable on your home loan.
- Through ECS (electronic clearing service) based on standing instructions to your bank
- Through postdated cheques (PDCs) drawn on your savings/salary account
- Tax Benefits
Resident Indians are eligible for certain tax benefits on principal and interest components of a home loan. As per Income Tax Act 1961 rules, the current applicable exemption under Section 24(b) is Rs 200,000 for the interest amount paid in the financial year, and up to Rs 150,000 (under Section 80C) for the principal amount repaid in the same year.
- Applicant and co-applicant
Home loans can be applied for by an individual. The loan amount can be further enhanced by including an earning co-applicant. Female property ownership is mandatory for EWS/LIG category but not so for MIG category.
- Disbursing Agencies
The Housing and Urban Development Corporation (HUDCO) and National Housing Bank (NHB) have been identified as central nodal agencies to channelise the subsidy to the lending institutions, including banks and financial institutions. Hence, small banks, non-banking financial companies and microfinance institutions have also been recognised as primary lending institutions under the scheme.
- Phase 1- It began in April 2015 and ended on March 2017. About a hundred cities were selected under this.
- Phase 2 – This phase started in April 2017 and will go on until March 2019. It will cover 200 more cities.
- Phase 3 – In this last phase, all remaining cities will be covered, and it will be last from April 2019 to March 2022.
The eligibility criteria for Pradhan Mantri Awas Yojna loan is quite simple.
- Any person who belongs to lower income group, also known as LIG or economically weaker sections, abbreviated as EWS of the society will be eligible for Pradhan Mantri Awas Yojna, if he or she meets the following parameters. Please note that people who belong to the middle-income group (MIG) are also eligible.
- You must not own a house made of a high-quality material or a pucca home in your name or the name of anyone in your family.
- Your family should consist of you, your spouse and your unmarried children.
- Households with an annual income of up to INR 3 lakhs belong to the economically weaker section while households with an annual income of INR 3 to 6 lakh belong to the low-income group.
- Households with an annual income of INR 12 Lakh per annum belong to the MIG-1 category while households with an annual income of INR 18 lakh belong to the MIG-2 category.
- People who belong to these income categories and an interest in home loan PM Yojna need to furnish an affidavit or proof of income.
- The Pradhan Mantri Awas Yojna loan preference is given to women. This proves it’s a pro-woman scheme. The preference also extends to the older citizens and the disabled people.
If you are after Pradhan Mantri Awas Yojna bank list to know which bank you need to contact to make your dream of owning a home a reality, then we suggest you simply click here.
Here you can know how to apply for PM Awas Yojna loan online:
- You need to visit the official PMAY website and click on ‘Citizen Assessment’ and then ‘Benefits under other 3 Components’.
- The next step is to provide your Aadhaar number in the given box without any spaces and click on check.
- Once your Aadhaar number is verified, you will be given access to a PMAY form.
- In the PM Yojna Loan form, you need to provide personal details, bank account details, contact information, income details and your Aadhaar information.
- After you have provided all the required information, you need to tick the box that states you are aware of any claims, etc. Then you need to enter the security captcha and click on save.
- At this stage, you will get an application number. Make sure you note it down for future reference.
- If you want to apply for Pradhan Mantri Awas Yojna home loan offline, you just need to visit the local PMAY listed bank’s branch with all the necessary documents required.
- After you receive the approval, you should select the property and finalize the purchase deal while getting a subsidized rate of interest.
The process of applying for Pradhan Mantri Awas Yojna home loan is quite easy if you are eligible for each scheme and keep the following documents handy.
- An identity proof like PAN Card, Aadhaar Card, Voter ID card or driver’s license.
- A copy of your address proof
- A perfectly filled PMAY application form
- An income proof
- Latest IT return or Form 16
- An affidavit claiming that you or a family member don’t own a pucca home
- Bank account statement of last 6 months
- Valuation certificate of the property you want to buy
- A construction agreement that is done with the developer or builder
- Certificate furnished by an architect or engineer that confirms the cost of new construction or repairs
- An approved plan of construction
- A certificate by the architect that mentions the fitness of the house
- A NOC from any housing society or an equally competent authority
- Property documents such as the letter of allotment
- Receipt of advance payment done by you for purchase
A person can buy or book a house as per the Pradhan Mantri Awas Yojana as a part of the government or even private projects. You are also free to build a house on your own. The house you are planning for must have toilets and needs to be created in an eco-friendly manner. You can apply for Pradhan Mantri Awas Yojna home loan only once. You can also apply for a loan for repair and renovation of a house.
We have done a sample calculation for you to make it easier for you to understand.
- House value (A) – Rs 3,500,000
- Home loan amount (B) – Rs 2,400,000 (70% of the value)
- PMAY subsidy (C) – Rs 230,167
- Net loan amount (B-C) – Rs 2,169,844
Type of Scheme
Household Income of the Applicant
Carpet Area (in square meters)
Subsidy Calculated on the basis of Maximum Loan Availed
LIG and EWS
Up to INR 6 Lakh
INR 2.67 lakh
INR 6 to INR 12 Lakh
INR 2.35 Lakh
INR 12 Lakh to INR 18 Lakh
INR 2.30 Lakh
To make use of a PMAY Calculator simply click here
- EWS/LIG – No
- MIG I & II – Area upto 90 square meters and upto 110 square meters
Some More FAQs
CLSS means Credit Linked Subsidy scheme and it decreases your home loan burden as the government chips in the required amount.
There is no processing fee associated with any aspect of Pradhan Mantri Awas Yojana.
The bank will claim subsidy benefit on your behalf from National Housing Bank, that will then conduct due diligence to ensure there are no multiple requests from one person. If you are proved eligible, the subsidy amount will be paid to your bank. Once the bank gets it, the amount will be credited upfront to the loan account.
Yes, subsidy as per MIG 1 and MIG 2 schemes are processed only if the Aadhar card details of all the family members are provided.
Yes, if an applicant only owns a plot, shop, factory or commercial establishment but doesn’t own a pucca house, he or she will be eligible for PMAY subsidy.
Women Ownership is not mandatory for all. Please refer to the table below.