India’s urban population is burgeoning and is predicted to grow to 814 million by 2050. Most urban poor that fall in the economically weak category or belong to low income groups are homeless or live in slums under cramped and unhygienic conditions.

Recognising the affordable housing needs of the underprivileged people, The Government of India launched the Pradhan Mantri Awaas Yojana (PMAY) in 2015. This scheme seeks to take up the major challenge of providing affordable, eco-friendly, and sustainable housing and home loans to the urban poor and other economically weaker classes. PMAY has the potential to drastically improve millions of lives as long as citizens. Here we explain how the PMAY works.

Home Loan Eligibility and Beneficiaries of PMAY

The main beneficiaries of PMAY are Economically Weak Classes (people who earn up to Rs. 3 lakhs per year), Lower Income Groups (people who earn Rs. 3-6 lakh per year), and Middle Income Groups (people who earn Rs. 6-12 lakhs per year). This scheme also benefits women, scheduled castes, scheduled tribes, senior citizens, physically disabled people, and transgenders. A beneficiary family consists of a husband, wife and their unmarried sons and/or daughters, and the family should not have any pucca houses in their names anywhere else in India. While people who belong to the EWC category get full coverage of housing costs from the government, LIG and MIG categories have to avail home loan subsidy in the form of Centrally Linked Subsidy Scheme.

Credit Linked Subsidy Scheme

It is a scheme wherein people in the LIG or MIG category can get up to 6.5% subsidy on regular home loans for 20 years from any PMAY-linked bank for building or buying a new house or adding a new room to an existing house. CLSS is managed by the Housing Urban Development Corp and National Housing Bank. These institutions focus on managing the financial aspects of providing affordable housing and maintaining the credit flow in financial institutions. People in the LIG and MIG categories can apply for housing loans with subsidized interest rates, and once approved, can avail a home loan from any bank which is linked to PMAY. There are different home loan interest rate subsidies for different economic classes, which are, EWC, LIG, MIG-I and MIG-II.

Tata Capital wholeheartedly believes in reasonable housing finance and dignified living for people from all walks of life, and hence provides affordable home loans under the PMAY scheme. Tata Capital also provides a full legal evaluation of your home and prompt customer service for any hurdles you may face. You can also find a reliable home loan calculator by using Tata Capital’s home loan EMI calculator Use our EMI calculator for home loan to calculate monthly payments and determine your home loan eligibility. Get in touch with us today for more information on PMAY-linked home loans.

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