What First-time Homebuyers Need to Know about PMAY

Owning a house is nothing short of a dream for many. To fulfil this dream, the Government of India has started the Pradhan Mantri Awas Yojana (PMAY). The aim is to provide ‘Housing for All’ by the year 2022 with the help of local and urban bodies. Altogether, it seeks to do the following:

1. In-situ rehabilitation of existing slum dwellers with help from the private sector
2. Provide credit linked subsidy
3. Affordable housing in partnership
4. Subsidy for beneficiary-led individual house construction/enhancement

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Among the above-mentioned schemes, the Credit-Linked Subsidy Scheme or CLSS is implemented as a central sector scheme. Its goal is to cater to the needs of the economically weaker section (EWS), low-income group (LIG), and middle-income group (MIG). CLSS offers home loan interest subsidies to people in the EWS and LIG categories at 6.5%. The subsidies offered to MIG-1 and MIG-2 candidates are 4%, and 3%.

The home loan under Pradhanmantri Aavas Yojna can be availed through various lenders. So, it would help to shop for an affordable home loan first. Don’t just stop at banks when looking for a home. Nowadays, non-banking financial companies like Bajaj Finserv bring you attractive pre-approved offers for home loans and more. This simplifies the process of availing financing and helps you save on time.

Eligibility criteria for PMAY under CLSS

There are some similarities and differences in PMAY eligibility criteria between EWCs/LIG, CLSS MIG-1, and MIG-2. First, here’s a list of the common factors.

1. Neither you nor your family must own a ‘pucca’ house in either your name or in the name of a family member.
2. You should never have sought central or state assistance under any housing scheme.
3. You must include the name of an adult female member name in the property ownership document.
4. The property should be located under the statutory towns as per 2011 census and their adjacent planning area.
5. The loan is sanctioned for 20 years and can be extended up to 30 years provided you repay the loan before turning 70.
6. A married couple is eligible for a single house only.
7. The loan accounts under this scheme are linked with Aadhaar. Equated monthly instalment (EMI) on home loan should not exceed 50% of your gross income. You can use a home loan EMI calculator to check the amount you need to pay.
8. If you default in the repayment of the loan, then the lender will proceed to recover the dues as decided by it. In all such cases, the recovered amount will be charged in proportion to the loan outstanding and subsidy disbursed.

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Here are the differences between the EWCs/LIG, CLSS MIG-1, and MIG-2 schemes

EWCs/LIG	MIG-1	MIG-2
Annual income should be between zero to Rs.3 lakh for EWS and Rs.3 lakh and Rs.6 lakh	Annual income should be between Rs.6 lakh and Rs.12 lakh	Annual income should be between Rs.12 lakh and Rs.18 lakh.
Subsidy amount would be Rs.2.67 lakh	Subsidy amount would be Rs.2.35 lakh	Subsidy amount would be Rs.2.30 lakh
Carpet area of the house under this scheme is 60 sq. mts	Carpet area of the house under this scheme is 160 sq. mts	Carpet area of the house under this scheme is 200 sq. mts
Subsidy is based on a maximum loan of Rs.6 lakh	Subsidy is based on a maximum loan of Rs.9 lakh	Subsidy is based on a maximum loan of Rs.12 lakh.
Can avail credit inked subsidy of 6.5% for loan amount up to Rs.9 lakh	Can avail credit inked subsidy of 4% for loan amount up to Rs.9 lakh	Can avail credit inked subsidy of 3% for loan amount up to Rs.9 lakh
The scheme is valid till 31 March 2022	The scheme is valid till 31 March 2019	The scheme is valid till 31 March 2019