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Pradhan Mantri Awas Yojna All you want to know

29, Jun, 2017


Who can apply for Pradhan Mantri Awas Yojana scheme?

A beneficiary under PMAY has been defined as:

  • A family comprising of husband, wife and unmarried children
  • Beneficiary should not own a pucca house either in their name or in the name of any member of their family in any part of India to receive central assistance under the Mission
  • Meeting income criteria defined under the scheme.

What are the income norms (criteria)?

The income norms for EWS / LIG categories are defined as follows:

  • EWS households with an annual income up to Rs. 3 Lakh.
  • LIG households with an annual income between Rs. 3 Lakh to Rs. 6 Lakh.
  • Middle Income Groups (MIG) which fall under the bracket of  annual incomes of above Rs 6 lakhs to Rs 18 lakhs are eligible for interest subsidy on housing loans under the new Credit Linked Subsidy Scheme (CLSS). (latest update : 24-March-2017).  People whose housing loans have been approved and whose applications are under consideration since January 1,2017 are eligible for subsidy under MIG – CLSS.

What is Credit Linked Subsidy Scheme?

One of the main aims of PMAY is to provide subsidy on home loans taken under this scheme. Below are few details about the subsidy scheme;

  • If the loan amount is less than Rs 6 Lakh then interest rate on loan is charged at 6.5% to the beneficiary. To avail this subsidy, the loan tenure has to be less than or equal to 15 years.
  • If the loan amount is more than Rs 6 Lakh, the interest rate of 6.5% is applicable on loan amount of up to Rs 6 Lakh and the remaining balance loan amount will be subject to normal prevailing market rates. For example : If you apply for home loan under PMAY scheme for Rs 10 Lakh, up to Rs 6 Lakh the interest rate is charged at 6.5% and the balance Rs 4 Lakh is charged at prevailing interest rates by your bank or lending institution.
  • If home loan amount is up to Rs.9 lakhs then the beneficiary will get home loan interest subvention / rebate of 4% per annum. This means if the prevailing interest rate is 10% then the home loan will be provided at 6% interest rate. (updated on 02-Jan-2017)
  • Similarly, if the home loan amount taken in 2017 is up to Rs.12 lakhs then the beneficiary will get home loan interest subvention of 3% per annum. This means if the prevailing interest rate is 10% then the home loan will be provided at 7% interest rate.
  • In villages, those wanting to build or expand their homes will get loans of up to 2 lakh, with a 3% interest relief.

How much subsidy will I get?

  • It would be computed at a rate of interest of 6.5% p.a on a maximum loan amount of Rs. 6 Lakh or the loan amount whichever is lower, for 15 years tenure with discounting rate of 9%.
  • For 6 Lakh the interest subsidy comes to around Rs. 2,20,000.
  • Hence an upfront subsidy of Rs. 2,20,000 would be claimed by your bank from NHB (National Housing Bank) and the same would be adjusted against the outstanding amount in your Loan Account.
  • The loan outstanding would reduce and result in lower EMI of approximately Rs. 2,000 for you. (Kindly click on the below image to calculate your subsidy amount.)
  • Illustration – If you avail a loan for Rs. 8 Lakh then the maximum subsidy works out to Rs. 2,20,000. The amount Rs. 2,20,000 would be reduced upfront from your loan account (i.e., the loan would reduce to Rs. 5,80,000) and you would pay EMIs on the reduced amount of Rs. 5,80,000 only. (Kindly note that 6.5% is the rate of interest up to Rs 6 Lakh & prevailing rate is charged for the remaining Rs 2 Lakh.)

Do I have to give any additional documents to avail this subsidy?

No, there is no additional documents except a Declaration of not owning a pucca house. If you do not have any income proof then you are required require to submit an Affidavit.

What is the rate of interest on home loan under PMAY?

 As mentioned above, the rate of interest is 6.5% for the loans up to Rs 6 Lakh. Any amount which is over and above this limit will be subject to normal market interest rates.

Should I buy a house which is provided under PMAY only?

The Government is planning to build around 2 crores of affordable houses by 2022 in a phased manner. You can apply for a house which is provided under this scheme (or) you can buy a house from a project (pvt) where 30% of affordable houses in the project are ear-marked for EWS category (or) you can build your own house or renovate the existing house.

What is the maximum loan amount that I can apply?

As such, there is no loan amount limit under this category of loans. 

         I have one own house. Can I apply for second house

         under PMAY?

         No, you can not apply for this scheme.

 


Posted by : Satish Singh

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