Recently, the government announced that it had completed the set objective of constructing one crore house under the PMAY scheme by 2018-19. Nearly 92% target was achieved in the 1st phase of the scheme.
The government had introduced the Pradhan Mantri Awas Yojana Scheme in 2015 to extend affordable housing facilities to the country’s economically backward households. To benefit from this scheme, individuals have to register at the official site and keep a tab on their application status. If selected, beneficiaries receive financial backup against a feasible interest rate to purchase a house.
However, to make the most out of this PMAY scheme, applicants must understand the variables linked with it first.
How does the PMAY subsidy function?
The subsidy offered under PMAY is divided according to a household’s annual income. There are three groups based on which the subsidy percentage is set. The government allows a 6.5% rate on a loan amount up to Rs.6 lakh. However, any amount exceeding the set limit is considered non-subsidised.
Apart from offering financial support, the scheme also helps a borrower repay the outstanding balance by providing a subsidy of a maximum amount of Rs.2.3 lakh.
The division of subsidy rate is as follows –
- Economically Weaker Section or EWS category are marked for having an annual household income of up to Rs.3 lakh. At the same time, LIG members have an income of Rs.6 lakh. A 6.50% subsidy is offered on home loan under PMAY to applicants belonging to any of these mentioned group.
- The next category is MIG-I that include applicants with an annual income of up to Rs.12 lakh. They receive a subsidy of 4% on a loan amount of Rs.9 lakh.
- Individuals with an income of Rs.18 lakh per annum will come under this category. They will receive a 3% interest subsidy on a credit amount of Rs.12 lakh.
After understanding how the PMAY subsidy works, interested applicants need to check the benefits offered under this scheme.
What are the benefits of the PMAY scheme?
- Under PMAY, individuals can avail of a subsidy of up to 6.50% on a home loan for 20 years.
- This scheme obligates the use of eco-friendly material to construct houses, thereby promoting sustainable living.
- Differently abled and senior citizens can apply for ground floor accommodation.
- PMAY scheme offers lucrative benefits for women applicants.
Beneficiaries can confirm their application and documentation status by logging into the PMAY list tab.
However, individuals first need to fulfil certain parameters set by the government to make a successful application.
What are the eligibility criteria for the PMAY scheme?
To enrol under this scheme, the following PMAY eligibility criteria have to be fulfilled –
- Individuals belonging to EWS and LIG category are allowed to apply for home renovation or improvement credit.
- Applicants belonging to scheduled caste or scheduled tribe group have to submit their respective caste certificates.
- The age limit to apply for this subsidy is 18 years to 70 years.
- An applicant must not be an owner of a pucca house, or a beneficiary of any additional home loan subsidy offered by the state or central government.
If an individual fails to clear the stringent Pradhan Mantri Awas Yojana eligibility criteria, they can look for easy alternatives.
One can opt for a home loan from HFCs that offer substantial funding against simple eligibility and easy documentation. Such lenders also provide pre-approved offers to streamline the loan application process. These offers are available on financial products like loans against property, home loans, etc. Check your pre-approved offer by providing your name and contact number.
The PMAY subsidy is a beneficial initiative put forth by the Central Government that offers financial backing to the country’s economically backward section. However, if the credits offered feel insufficient to purchase a preferred house or an applicant fails to clear the eligibility parameters, they can look for alternative financing options.
