Pradhan Mantri Awas Yojana (PMAY)
The Pradhan Mantri Awas Yojana (PMAY), a type of housing loan scheme works to provide subsidies to the eligible family to either purchase a new house or to renovate the current one. Even if several banks offer minimal home loan interest rates, yet this subsidized loan makes the purchase of the house more affordable for the eligible people.
The PMAY model of subsidized loan focuses to help the economically weaker section of the society to build a house of their own. Many a time, people try to take advantage of this scheme and track on the path of fraudulence. But the consequences of the fraudulence could make people struggle for years in future. The ones willing to avail this subsidized loan scheme should have thorough knowledge about its work, eligibility and amount of subsidy offered. Scroll down to acknowledge the details on PMAY subsidy scheme.
PMAY Eligibility Criteria
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The first and foremost thing to be done to avail financial reinforcements from the government is to meet the eligibility criteria of PMAY scheme. The following list illustrates the criteria of availing the PMAY.
Economically weaker section (EWS) includes the household which earns less than Rs.3 lakhs per annum. People who fall under this category can avail the PMAY scheme only after submitting the relevant documents to ascertain their category claim.
LIG
Light Income Group (LIG) comprises of households having an annual income ranging between Rs.3 lakh to Rs.6 lakhs. However, the LIG households have to prove their economic standing with valid documents.
MIG1
The Middle Income Group earning an annual income below Rs.12 lakhs are often referred to as MIG 1. The households falling under this category can avail loan up to Rs.9 lakh either for the purchase or for the renovation of the house.
MIG2
The Middle Income Group having an annual income in the range of Rs.12 lakh to Rs.18 lakh falls under the MIG2 category of the PMAY scheme. The loan bracket of Rs.12 lakh can be availed by them.
Minorities
Households belonging to the SC/ST/OBC category fall under the minorities. To avail the PMAY scheme, these households have to submit relevant caste and income certificates before the PMAY committee.
Women
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The women hailing from the EWS or LIG category can easily avail the PMAY scheme.
Apart from the income bracket that has been considered eligible for the PMAY scheme, there are certainly other factors as well which are considered while approving the applicant’s request with the housing loan. These factors are mentioned below.
- The ones who already own a house are not eligible to avail the PMAY scheme.
- The beneficiary should not have availed any housing scheme before from the government.
- The beneficiary family should comprise of a husband, wife, unmarried son and an unmarried daughter.
- The beneficiaries should submit their Aadhaar card to avoid any duplication or occurrence of fraudulence.
- The carpet area has to be checked under every category.
How Does the Scheme Work?
Usually, a borrower has to make a certain amount of downpayment and the rest of the amount of the house costing can be arranged by availing a loan for which they have to pay EMI on regular basis. However, under the PMAY scheme, the borrower can avail for a subsidy up to a certain per cent and pay the loan interest rate on the rest.
For example, if a borrower wishes to buy a house with an overall cost of Rs.60 lakh, then he will have to make a minimum down payment of Rs.20 lakh while availing a loan for the rest of the amount. If the borrower falls under any of the above-mentioned categories then he will get a subsidy up to a certain per cent. Under this example, the owner falls under the MIG2 category then he will get a PMAY subsidy of about 3% which is applicable till Rs.12 lakh. The borrower will have to pay the interest rate on the rest of the amount which is Rs.36 lakh.
Subsidy
The different income defined category will get different subsidy benefits under the PMAY scheme. Check the following table to check the per cent of subsidy that can be availed under the following category.
| Category | Subsidy per cent |
| EWS | 6.5% |
| LIG | 6.5% |
| MIG1 | 4% |
| MIG2 | 3% |
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The recent changes under the PMAY scheme have made the housing loan more affordable. The GST for the housing cost under PMAY 2020 has been slashed from 12% to 8%. On fulfilling the eligibility criteria the household can easily apply for the PMAY scheme at any leading financial institute, which aims to make house construction affordable for all.
Great initiative for the common people of our country. But a drawback is that isn’t applicable for homes in rural areas of our country. Rest of the factors are indeed good. GST has also been reduced. All the public and private sector banks should actively support in implementing this scheme.