Most people may have heard of Pradhan Mantri Awas Yojana, but may not be aware of what exactly this plan is. This article summarises everything that you want to and need to know about Pradhan Mantri Awas Yojana (PMAY).
What is Pradhan Mantri Awas Yojana?
Launched by the Government of India, PMAY aims at making housing affordable for all Indians. There are two types of schemes:
- Pradhan Mantri Awas Yojana Urban (PMAY-U)
- Pradhan Mantri Awas Yojana Grameen (PMAY-G)
As the names suggest, the first plan is for those living in urban areas while the second plan is to provide monetary help for those living in rural areas.
Both schemes provide financial assistance and credit subsidies to those looking to build or buy their own home.
One of the main features of PMAY is the credit linked subsidy scheme. This credit subsidy is provided on the interest charged on home loans.
For both middle-income groups and people from economically weaker sections of society, this interest subsidy is provided on home loans taken either for purchase or for construction of a home.
Features of PMAY
- A subsidy of 6.5% on the interest rate for the home loan for a period of 20 years.
- It is mandatory to use eco-friendly material for construction.
- Unless there is no female family member, the scheme makes it compulsory to register the property under the names of both the male and female members of your family.
- The scheme is elderly friendly and differently-abled friendly. This is why it is mandatory for homes that are being built to provide ground floor accommodation for the differently abled as well as senior citizens.
- GST for those applying for a loan via this scheme is 8%. This was brought down from 12%.
Who is eligible for PMAY?
To be eligible for PMAY, you need to meet the income criteria set by the government for this plan. The four groups that are eligible for the scheme are:
- Persons belonging to economically weaker sections of society (EWS)
- Those who belong to low-income groups (LIG)
- Individuals who are part of the middle-income group (MIG I)
- Those who belong to the second tier of the middle-income group (MIG II)
|Criteria||EWS||LIG||MIG I||MIG II|
|Annual household income||Up to Rs.3 lakh||Rs.3,00,001 to Rs.6 lakh||Rs.6,00,001 to Rs.12 lakh||Rs.12,00,001 to Rs.18 lakh|
|Woman co-ownership/ ownership||Compulsory for new property, not existing property||Compulsory for new property, not existing property||Not compulsory||Not compulsory|
|Existing permanent home||Applicant or applicant’s family cannot have a permanent dwelling of their own|
Note: if you or your family members have already benefitted from a Government of India housing scheme, you will not be eligible for PMAY. Moreover, not all cities in India are on the approved list of cities for PMAY. You can find the list of cities by logging in to the Ministry of Housing and Urban Affairs website.
What you need to keep in mind
Based on the income group you fall under, here is what you need to keep in mind:
- Apply for the scheme before 31 March 2022.
- EWS individuals can choose a home with a carpet area of 30 metres square and the carpeted area for LIG individuals is 60 metres square.
- The loan tenure is up to 20 years and you need to repay the loan before you turn 70 years.
MIG I individuals
- A subsidy of 4% is applicable on the interest up to Rs.9 lakh only. Any extra amount taken up that will not receive a subsidy.
- The total carpet area of the home cannot be more than 120 metres square.
- The maximum tenure of the loan is 20 years. However, banks can extend this to 30 years on a case-to-case basis.
- Your age at the end of repayment cannot be greater than 70 years.
- Total debt payments including the EMI on your home loan cannot be more than 50% of your gross income.
MIG II individuals
- The credit linked subsidy of 3% is limited to Rs.12 lakh. If your loan is greater than Rs.12 lakh, the subsidy will not be applicable on the additional amount.
- The loan tenure is 20 years which can be extended to 30 years on a case to case basis. This will be provided only if you are less than 70 years old at the end of the repayment period.
How to apply for PMAY
If you meet the eligibility criteria and are looking to apply for this scheme, here are the steps you need to follow:
Apply via the Joint Facilitation Centre:
- You will need your Aadhar number and two passport size photographs to complete your application.
- Pay a fee of Rs.25.
- You will then receive an application number. This number can be used to check the status of your application.
You can also apply online by visiting the official PMAY website:
- Visit the PMAY website.
- Click the ‘Citizen Assessment’ tab.
- Then choose ‘Benefits under other 3 Components’.
- Enter your Aadhar number (without spaces) and then select ‘Check’.
- You will then receive the PMAY application form. Fill in the required details and submit the form.
- Click on ‘Save’.
- You will receive an application number. You can use this number to track the status of your application.
Documents needed to apply for PMAY
- Completed PMAY
- Identity proof. This can be your PAN card, Aadhar card, voter ID card, or driver’s license.
- Address proof.
- Proof of income and a self-attested income certificate.
- Your latest income tax return or form 16.
- Bank account statement for the last 6 months.
- An affidavit claiming you or an immediate family member do not own a property in India.
- A valuation certificate of the property you are looking to purchase.
- Construction agreement with a builder or developer.
- An approved construction plan as well as a certificate from an architect or engineer stating the cost of construction or repairs.
- A certificate from the architect stating the property’s fitness.
- NOC from a housing society or any other recognised body.
- Letter or allotment and other property-related
- An invoice/receipt for the advance payment you made for the purchase.
PMAY is a way to ensure that all Indians have access to affordable housing since housing is the right of all and not just the affluent. However, like with any loan, do your research and choose the right developer or home before you go ahead and apply for this scheme.