PRADHAN MANTRI AWAS YOJANA (PMAY)

Ministry of Housing and Urban Poverty Alleviation (MoHUPA) has introduced in June 2015, an interest subsidy scheme called Credit Linked Subsidy Scheme (CLSS) under Pradhan Mantri Awas Yojana (URBAN)-Housing for All, for Purchase / Construction / Extension / Improvement of house to cater Economical Weaker Section (EWS) / Lower Income Group (LIG) / Middle Income Group (MIG), given the projected growth of urbanization & the consequent housing demands in India.

PMAY Benefits

Credit Linked Subsidy Scheme (CLSS) under PMAY makes the home loan affordable as the subsidy provided on the interest component reduces the out flow of the customer on the home loan. The subsidy amount under the scheme largely depends on the category of income that a customer belongs to and the size of the property unit being financed.

The benefits as per the income categories are as follows:

EWS/LIG category:

LIG and EWS categories are defined as those whose annual household incomes are above Rs.3 lakh but below Rs.6 lakh .The beneficiaries belonging to the Economically Weaker Section (EWS) and Lower Income Group (LIG) categories are eligible for a maximum interest subsidy of 6.5%, provided that the unit being constructed or purchased does not exceed the carpet area requirement of 60 square metres (approximately 645.83 square feet). The interest subsidy is limited up to a maximum loan amount of Rs.6 lakh.

The scheme was extended to include the Middle Income Groups (MIG) in 2017. This scheme was divided into two parts i.e. MIG 1 and MIG 2.

MIG 1 category:

MIG 1 category is defined as the one with household income of above Rs.6 lakhs but below Rs.12 lakhs. The beneficiaries in the MIG- 1 category are eligible for a maximum interest subsidy of 4%, provided that the unit being constructed or purchased does not exceed the carpet area requirement of 160 square metres (approximately 1,722.23 square feet). This subsidy is however limited to a maximum loan amount of Rs.9 lakhs over a home loan tenure of up to 20 years.

MIG 2 category:

MIG 2 category is defined as the one with household income of above Rs.12 lakhs but below Rs.18 lakhs. The beneficiaries of the MIG - 2 category are eligible for a maximum interest subsidy of 3%, provided that the unit being constructed or purchased does not exceed the carpet area requirement of 200 square metres (approximately 2,152.78 square feet). This subsidy is however limited to a maximum loan amount of Rs.12 lakhs over a home loan tenure of up to 20 years.