Making the Most of PMAY for EMI Reduction

Introduction

The Pradhan Minister Awas Yojana (PMAY) is a scheme launched by the Government of India which aims to provide housing for all. This scheme comprises the Urban and the Gramin components for the urban and rural poor, respectively.

It is an initiative by our honorable Prime Minister, Shri. Narendra Modi looks promises ‘housing for all’ by 2022. The scheme will offer central assistance to implementation institutions through state and union territories.

The PMAY Credit Linked Subsidy Scheme (PMAY-CLSS) is a housing loan scheme with the objective to provide a home to everyone by 2022. Eligible applicants will benefit from an interest subsidy for the purchase or construction of a home. The loan may also be used to improve an existing home or to prepay their existing housing loan.

PMAY Eligibility Criteria

• If you belong to the Low-Income Group (LIG), Economically Weaker Section (EWS), and the middle-income group I & II, you are eligible to apply for a loan under this scheme
• You must be less than 70 years of age
• Income criteria: Refer to the table below

• Eligible women citizens: The houses constructed/acquired with central assistance under the Mission should be in the name of the female head of the household or in the joint name of the male head of the household and his wife, and only in cases when there is no adult female member in the family, the house can be in the name of male member of the household.
• Carpet area: Refer to the table below

• You must not own a pucca home either in your name or in any family member’s name in the country
• Maximum home loan tenure to calculate subsidy under this scheme is 20 years

Coverage

• All statutory towns based on the Census 2011 and subsequently notified towns are eligible for coverage under the PMAY-CLSS for the MIG beneficiaries
• Planning area notified as per statutory towns that surround municipal areas will also be covered under this scheme
• Credit-linked subsidy for MIG – I for loan amount up to INR 9 lakh is at 4% and for MIG – II applicants for an amount up to INR 12 lakh is 3%; if a higher loan amount is sanctioned by the lender, the subsidy is available only for the specified amounts
• Net Present Value (NPV) is calculated at the 9% discounted rate and is credited upfront to your loan account
• Maximum eligibility: Refer to the table below

Interest rates are customized based on your needs and you may use the online home loan EMI calculator to estimate the interest for different loan amounts.

It is also important to understand that an individual must meet the eligibility criteria in order for him/her to apply for a loan under PMAY. Your loan application will not be processed in case you do not fit within one or more criteria.

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