The Pradhan Mantri Awas Yojana – How It Works and What Are The Benefits?

The Pradhan Mantri Awas Yojana (PMAY) has brought generous smiles on its beneficiaries’ faces. The government is on a ‘Housing For All By 2022’ mission to ensure concrete shelters for every Indian citizen, and the PMAY is playing a pivotal role in contributing to the mission. If you have been postponing your housing dreams till now, PMAY can give you enough reasons to gear up and fulfil your aspiration of owning a house.

Read this article to know about Pradhan Mantri Awas Yojana’s various benefits and how a housing loan has just become more affordable under this scheme. 

Decoding the Pradhan Mantri Awas Yojana

The Pradhan Mantri Awas Yojana (PMAY) is divided into two parts and targets two categories of first-time homebuyers.

  • Category 1 – The category 1 comprises of EWS and LIG homebuyers. EWS or Economically Weaker Section refers to people whose annual income is under INR 3 lakh. LIG or Lower Income Group refers to people whose annual income between INR 3 lakh and 6 lakh. Borrowers in category 1 get 6.50% interest subsidy on housing loan from the central government, when the loan amount is INR 6 lakh, and the loan term is 20 years. If the loan amount is lesser than INR 6 lakh
  • Category 2 – The category 2 comprises of MIG-1 and MIG-2 homebuyers. The category 2 is eligible to receive interest subsidy on housing loan under the PMAY-CLSS (Credit Linked Subsidy Scheme). MIG-1 refers to the Middle Income Group whose annual income is more than INR 6 lakh but less than 12 lakh. MIG-2 refers to the Middle Income Group whose annual income is between INR 12 lakh and Rs.18 lakh. For MIG-1, the interest subsidy on housing loan is calculated at a rate of 4% up to an amount of INR 9 lakh. For MIG-2, the interest subsidy on housing loan is calculated at a rate of 3% up to an amount of INR 12 lakh.

For both categories of borrowers, if the housing loan amount exceeds the maximum amount eligible for interest subsidy, the extra amount will have a different interest rate, as per the prevailing rates offered by the lender. 

How to Get Housing Loan Interest Subsidy Under the Pradhan Mantri Awas Yojana

To receive interest subsidy on a housing loan, you need to first select a lender who provides PMAY-linked housing loans. If you fulfil the income-based eligibility criteria, the lender may waive off the processing fee. However, if the loan amount is higher than the PMAY linked housing loan eligibility, the lender may charge a processing fee for the extra amount.

After selecting the lender, you need to fill an application form by visiting http://pmaymis.gov.in/ to receive interest subsidy on housing loan. You can also track your application on the CLSS Awaz Portal (CLAP).

What are the Benefits of Pradhan Mantri Awas Yojana?

The following are the benefits of availing a housing loan under the Pradhan Mantri Awas Yojana.

  • Fulfils the Housing Dream of Every Indian Citizen – PMAY provides an interest subsidy of up to 6.50%, meaning everyone gets an opportunity to construct their own house. The scheme has a target of constructing 2 crore houses by 2022.
  • Promotes Affordable Housing – House construction is a massive expense. PMAY makes it easier.
  • Empowers Women – Under PMAY laws, it is mandatory to include a woman’s name as the applicant or co-applicant. Hence, the scheme empowers women.

Conclusion

The deadline for housing loan under PMAY-CLSS scheme has been extended until 31 March 2022 for borrowers in category-1 mentioned earlier and until 31 March 2021 for borrowers in category-2. If you have postponed your housing dreams till now, this is the best time to contact PNB Housing Finance for PMAY-linked housing loans.

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