Affordable housing still remains a distant dream for the common man. The Government of India acknowledges this and has passed various schemes to offer financial assistance to those who hope to own their own house. The PMAY home loan can offer you financial help based on which category of the scheme you identify yourself with.
This FAQ covers the most important questions about the PMAY Urban scheme that every homebuyer must know.
1. What is the Pradhan Mantri Awas Yojana (PMAY)?
The PMAY home loan scheme ensures housing assistancefor all eligible individuals in urban areas. This scheme was launched in June 2015 and aims at providing pucca houses to all the eligible beneficiaries by 2022. The scheme offers assistance to all the fulfilling agencies to provide houses to all the eligible beneficiaries or families.
Numerous options have been offered to individuals based on the availability of land and their finances. Currently, the four main options are available.
- Credit Linked Subsidy Scheme (CLSS)
- Beneficiary-led individual house construction/enhancements (BLC)
- Affordable Housing in Partnership (AHP)
- In-situ Slum Redevelopment (ISSR)
2. What is Credit Linked Subsidy Scheme?
This scheme is anelement of PMAY home loan which offers financial assistance not just to the economically weaker sections in the society but also to the middle-income groups. The eligible candidates can avail home loans at reduced monthly interest rates.
In order to be eligible for availing CLSS benefits, the applicants need to fall under one of the following annual income slabs.
- Middle Income Group-I (₹6 lakh – ₹12 lakh)
- Middle Income Group-II (₹12 lakh – ₹18 lakh)
- Economically Weaker Section/Lower Income Group (₹ 3 lakh – ₹6 lakh)
3. What are the Eligibility Requirements for CLSS?
The following eligibility requirements have been laid down for CLSS categories.
- A female member of the family needs to be included in the property ownership
- A family female member must co-own the property
- The applicant/household must not own any pucca house anywhere in India
- The location of the property must be within the statutory towns as defined under the scheme
- Applicants must not have availed any government aid under any of the housing schemes previously
4. What are the Benefits offered under the CLSS scheme?
Individuals under Middle Income Group-I category receive a 4 percent interest subsidy on the loan amount to up to ₹9 lakhs.
Under the second slab of Middle Income Group- II, the eligible individuals are offered a subsidy of 3 percent on a loan amount of up to ₹12 lakh. Additional loans can be taken from a lender; however, it would not be subsidized.
5. What are the benefits offered for Low-Income Groups (LIG) and for Economically Weaker Sections (EWS)?
Beneficiaries under this slab receive a subsidy of 6.5 percent for a tenure of 20 years or for the entire tenor of the home loan period. Whichever is lower would be considered in the estimation.
Those who have an income of less than 3 lakh belong to the low income group. Under this category, preferential treatment is offered to individuals with disabilities, minorities and women.
6. Who is defined as a beneficiary under PMAY Urban scheme?
A beneficiary is defined as a family that comprises of a husband, wife and their unmarried children. A beneficiary must not own any pucca house in his or her name or in the name of any other member of the family in order to become eligible for the assistance.
A person owning a pucca house less than 21 square meters can be considered under the enhancement of the existing house. Any adult earning member of the family, regardless of their marital status can also be eligible.
Beneficiaries belonging to the EWS category are eligible for assistance in all four verticals of this scheme. However, MIG/LIG beneficiaries can seek financial assistance under the CLSS component only.
7. What are Primary Lending Institutions (PLIs)?
The Housing finance companies, scheduled commercial banks, state cooperative banks, regional rural banks, urban cooperative banks, or any other institutions recognized by the Ministry of Housing and Urban Affairsare referred to as PLIs.
8. How would the subsidy be released under the PMAY home loan scheme?
The central assistance would be released directly to the verified bank accounts of beneficiaries. The subsidy would be released based on the disbursements made by PLIs to the beneficiaries under the scheme.
The subsidy then disbursed to the PLI would be credited directly to the borrower’s account in the form of deduction in the principal loan amount. As a result, the beneficiary will have to pay EMI on just the remaining principal loan amount.
For instance, if a borrower avails a loan of ₹6 lakhs and becomes eligible for a subsidy of ₹2.2 lakhs, then the subsidy amount would be deducted upfront from the loan amount. Hence, the borrower would then have to pay an EMI on ₹3.80 lakhs.
No processing charges are levied on a beneficiary under PMAY Urban scheme. For any additional amount lent by the beneficiary, interest would be charged by the lenders and a normal processing fee would be demanded.
9. Is there any restriction on the carpet area under the scheme?
The carpet area is defined as the area enclosed within the walls of the housing unit or structure. This area does not cover the thickness of the inner walls. The built-up area includes the dimensions of the balcony, outer walls and the common areas as well. However, under the PMAY scheme, only the carpet area is considered.
There is a clear description of the carpet area that needs to be looked up across all categories. Initially,the requirement was a carpet area of 90 square meters for the Middle Income Group I category and for MIG II the cap was 110 square meters.
There was a revision made to the carpet area of houses eligible for interest subsidy in June 2018 under the CLSS scheme. The carpet area was increased to 160 square meters for MIG-I and to 200 square meters for MIG-II.
10. How to apply for the PMAY home loan scheme?
- You can submit an online application by visiting the official website i.e. https://pmaymis.gov.in/
- Select the Citizen Assessment option from the menu
- Enter your 12-digit Aadhaar card number
- You need to furnish your personal information on the application page such as the residential address, bank account information and income details
- Enter all the relevant information and click the Save option for generating the application number
- Download and print the filled application form
- Submit the form at the nearest financial institution covered by the scheme.
Disclaimer: The contents of this article are for information purposes only and does not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.
Credit of Subsidy under PMAY EWS SCHEME takes long time to generate Application Id and further processing. PMO should give standing instructions for clearing the Subsidy amount after verification within a framed Time.