A Home Loan Subsidy means concession offered on the Home Loan. The facility of home loan subsidy is offered to make housing affordable for everyone.
A price of real estate is skyrocketing across India. It is becoming difficult to buy own house by the common man. To support common man in fulfilling his desire to buy residential property the government of India has launched Pradhanmantri Aawas Yojana (PMAY) – Home Loan Subsidy scheme.
Pradhan Mantri Awas Yojana (PMAY) as the name suggests it is a housing scheme launched by the government of India. The prime objective behind this scheme is to achieve the goal of “Housing for All” by 2022 (75th Year of India’s Independence). Pradhan Mantri Awas Yojana is divided into two parts – PMAY – U (Urban) & PMAY – G (Gramin).
Also Read – Section 80EEA – Income Tax Deduction on Home Loan Interest
Pradhan Mantri Awas Yojana Urban (PMAY-U)
PMAY – U is for the urban (city) area. The scheme has four modules –
- In situ rehabilitation of slum with the private sector partnership – GOI grant 1 Lakh per house.
- Credit link subsidy scheme – Interest subsidy from 3 to 6.5%.
- Affordable Housing via Partnership – Assistance of 1.5 Lakh per EWS house.
- Subsidy for beneficiary led house construction – GOI grant 1.5 Lakh per house.
Pradhan Mantri Awas Yojana Gramin (PMAY-G)
PMAY – G is for the rural area. This scheme was earlier known as Indira Awaas Yojana. The basic aim is to provide housing for the rural poor in India. Under this scheme, the government provides assistance to the homeless and poor people living in low-quality houses.
As discussed above under PMAY – U scheme, middle-class people can get home loan subsidy from 3-6.5 %. The complete method to check eligibility and process of applying home loan subsidy under this scheme is given below.
PMAY Eligibility Criteria
The applicant eligibility for credit-linked subsidy scheme (home loan subsidy) is given below.
- As an applicant you or your family should not be holding any other house. This scheme is applicable for the family’s first house only.
- You should not have participated in any of the government housing scheme earlier.
- The carpet area of property should be between 322 Sq. feet to 2150 Sq. feet. The sizing depends upon your income.
- In order to apply for PMAY credit subsidy you should meet annual income range.
- Economically Weaker Sections (EWS)- up to Rs. 3 Lakh
- Low Income Groups (LIG)- Rs 3 Lakh to Rs 6 Lakh
- Middle Income Groups-I (MIG)- Rs 6 Lakh and Rs 12 Lakh
- Middle Income Groups-II- Rs 12 Lakh and Rs 18 Lakh
EWS & LIG
Under economic weaker section & Low income group one can get maximum subsidy of 6.5% on the home loan. Maximum loan amount for the subsidy is 6 Lakh. The carpet area of limit for EWS and LIG is from 322 Sq feet to 645 Sq feet. Maximum subsidy amount is 2.67 Lakh. Maximum term for which subsidy will be calculated is 20 years.
Middle Income Groups – I
For middle income group I, one can get maximum subsidy of 4% on the home loan up to 9 lakh. The carpet area limit for MIG-I is 1722 Sq. feet. Maximum subsidy amount is 2.35 Lakh for the loan tenure up to 20 years.
Middle Income Groups – II
For middle income group II, one can get maximum subsidy of 3% on the home loan up to 12 Lakh. The carpet area limit for MIG-II is 2152 Sq. feet. Maximum subsidy amount is 2.3 Lakh for the loan tenure up to 20 years.
Summary –
| Criteria | EWS & LIG | MIG-I | MIG-II |
| Household/ Annual Income (Rs) | Up to Rs. 6 lakhs | Rs. 6.01-12.00 lakhs | Rs. 12.01-18.00 lakhs |
| Property Area (Carpet Area) | 322-645 | 1722 | 2152 |
| Woman Ownership | Yes (except for construction) | NA | NA |
| Max Loan Amt for Subsidy | Up to 6 lakhs | Up to 9 lakhs | Up to 12 lakhs |
| Subsidy % | 6.5% | 4.0% | 3.0% |
| Subsidy Amount | Rs. 2.67 lakhs | Rs. 2.35 lakhs | Rs. 2.30 lakhs |
How to Apply for PMAY?
There are two ways to apply for Pradhan Mantri Aawas Yojana.
Online Mode
- First Step is to log on to the official PMAY website: http://www.pmaymis.gov.in/
- From top menu click on the Citizen Assessment and go to “Benefits under other 3 Components”.
- On the new page enter your Aadhaar Number & Name as per Aadhaar.
- Click on “Check”. If correct Aadhaar number is entered it will open PMAY application form.
- Fill up personal information, bank account number, income and other required information.
- Once you are done with filling up application tick the checkbox and enter captcha click on “Save”.
- System will display your assessment ID on the screen. Note down this number you will need it while checking the status.
Offline Mode
The process of applying for home loan subsidy via offline mode is very simple. You can apply for Home Loan at PMAY listed bank by submitting required documents. While applying at bank you need to inform bank that you will be applying for PMAY credit linked subsidy.
After your loan is disbursed, the bank will apply on your behalf for PMAY by sending detail to approving agency. If you are eligible they will send subsidy amount to the lender. The amount of subsidy will be used to reduce your home loan amount. This will make home loan more affordable.
Alternatively, you can fill up the form for subsidy offline at common service center. You need to pay Rs.25 + GST for the form.
How to check PMAY Status after Applying?
You can check the status of online application at PMAY Portal. From top navigation menu click on Citizen Assessment and go to “Track your Assessment Status”.
You will be asked two different options for the tracking. You can either track your application via assessment ID and mobile number. Another method to track status is via Name. Along with name you need to enter mobile number & father’s name.
Over to you
I hope you have got complete understanding about PMAY scheme including eligibility, method to apply and track your application. For queries and suggestion use the comment form given below.