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Tata Capital > Blog > Loan for Home >   How to apply for a government housing scheme?

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  How to apply for a government housing scheme?

  How to apply for a government housing scheme?

With the rise in property rates in India, buying a house is still a distant dream for many!

However, in the past few years, India’s central and state governments have introduced multiple housing schemes to help the economically weaker sections get affordable housing. If you are an aspiring homeowner looking for a house at a reasonable rate, you can find one through a government housing scheme!

For instance, the Pradhan Mantri Awas Yojana (PMAY) scheme by the Indian government provides affordable housing to people living in urban and rural areas. Eligible beneficiaries can avail of this government home loan scheme and many other schemes from any NBFCs.

Read further to know more about the application process, eligibility, and documents required to apply for it.

What is a government housing loan scheme?

A government housing loan scheme is a homeownership initiative launched by the Central or State Governments. It makes housing affordable for citizens by offering interest subsidies. It also lowers the EMI burden and relaxes eligibility criteria for financial assistance. The focus of housing loan schemes in India is aiding Economically Weaker Sections (EWS), Low-Income Groups (LIG), Middle-Income Groups (MIG), and first-time homebuyers. 

Popular govt. home loan schemes include the Pradhan Mantri Awas Yojana (PMAY), which aims to promote “Housing for All” by encouraging people to buy or construct pucca homes. These government housing loan schemes are available through banks and housing finance companies. This makes home loans more accessible and affordable for eligible applicants.

Popular government housing schemes in India

The most popular government housing schemes that are making homeownership affordable and accessible across income groups include:

  • Pradhan Mantri Awas Yojana (PMAY): The govt. housing program offers interest subsidies on home loans for EWS, LIG, and MIG categories, promoting first-time homeownership.
  • Rajiv Awas Yojana: The scheme focuses on slum redevelopment and providing basic housing facilities to the urban poor.
  • Credit-Linked Subsidy Scheme (CLSS): CLSS is a component of PMAY that reduces home loan interest burden through upfront subsidies.
  • State Housing Schemes: Various states offer additional benefits such as lower stamp duty, affordable housing projects, and special incentives for women and economically weaker sections.

Benefits of government housing loan schemes for homebuyers

There are several benefits of government home loan schemes in India. These include:

  • Interest subsidy: Eligible homebuyers receive subsidized interest rates. This reduces overall loan cost and monthly EMIs.
  • Lower financial burden: Reduced EMIs make it easier for low- and middle-income families to manage repayments.
  • Support for first-time buyers: Many schemes are designed for first-time homebuyers, encouraging homeownership.
  • Tax benefits: Another advantage of govt. housing schemes is that borrowers can claim tax deductions on principal and interest payments as per income tax rules.
  • Inclusive housing access: These schemes promote housing for economically weaker sections, ensuring wider access to quality homes.

Eligibility criteria for government housing loan schemes 

Different loan schemes follow distinct eligibility conditions. To become a beneficiary under the Pradhan Mantri Awas Yojana housing for all scheme, you must fulfill the following eligibility criteria:

  • The applicant’s family income must be within Rs. 3 lakh, Rs. 6 lakh, and Rs. 9 lakh for EWS, LIG, and MIG categories, respectively.
  • The applicant should not be the owner of a pucca house in any part of the country.
  • The applicant’s family should not have any central assistance under a different housing scheme by the central or state government.
  • The applicant must be a part of any of these groups – Economically Weaker Section (EWS), Scheduled Tribe (ST), or Scheduled Caste (CS).
  • A woman applicant living on the periphery of metro cities that come under Tier I, Tier II, and Tier III can also apply.

Documents required for the government housing scheme

Here is a list of forms you are required to submit when applying for a government housing scheme:

  • Application form
  • Authority Letter
  • Customer Request Form
  • Disbursement Request Form
  • Cheque Submission Form
  • Terms and Conditions Form

You will also be asked to furnish certain official documents, like the Aadhaar card, along with the forms for identification purposes.

Additional Read: Affordable Housing in India: Know about the Measures Taken By RBI

How to apply for government housing loan schemes?

There are different ways to apply for affordable housing schemes with NBFCs. You can apply for the loan through these methods:

Online

The most hassle-free way to apply for a government loan scheme is through online services. You can visit the website of a trusted lender and fill out the application. If you have queries, you can contact the lender for assistance.

Telephone

Another way to apply for a housing scheme is through phone services. You can call the customer care number of a lender and ask for the steps to apply.

Visiting the branch

If you wish for a face-to-face consultation, you can visit the financial institution’s branch and talk to lending experts. You can locate a branch near you by calling customer care or searching online.

When applying for the loan, be prepared to answer any questions by the lender and even have a one-on-one conversation. Lenders typically approve the home loan after careful assessment and consideration of your financial profile.

Additional Read: What is The Affordable Housing Criteria to be Eligible?

Conclusion

Looking for a trusted source to obtain housing finance? Check out Tata Capital’s home loan interest rates and other attractive features for borrowers. We are a one-stop destination for all your housing finance needs! Borrow a loan under various housing schemes hassle-free. And if you’re securing your dream home while managing a business, our business loan app ensures you never compromise on growth. Get in touch with us for further assistance!

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FAQs

What is a government housing loan scheme?

A government housing loan scheme is the Central or State Government’s initiative to make homeownership affordable. It offers interest subsidies, lower EMI burden, and easier loan access to eligible citizens, especially low- and middle-income groups, first-time buyers, and economically weaker sections.

Who is eligible for government housing schemes like PMAY?

EWS, LIG, and MIG households with an annual income within the prescribed limits are eligible for the PMAY housing scheme. First-time homeowners are also eligible. Applicants or their family members should not own a pucca house anywhere in India, and also meet the property criteria. 

What documents are needed to apply for PMAY and other govt. schemes?

The documents you need to apply for PMAY and other housing loan govt. schemes include Aadhaar card, PAN card, income proof, bank statements, property documents, loan sanction letter, and an affidavit confirming first-time homeownership. You may need to give caste or domicile certificates for some schemes, depending on eligibility conditions. 

How can I apply for the Pradhan Mantri Awas Yojana?

You can apply for the Pradhan Mantri Awas Yojana online through the official portal or offline via authorized banks, housing finance companies, or common service centers. Once the details and documents are verified, the loan is disbursed.

Are there tax benefits in government housing loan schemes?

Yes, government housing loan schemes offer tax benefits on principal repayment under Section 80C and interest paid under Section 24(b) of the Income Tax Act. There are also some additional tax benefits for first-time homebuyers. Check the prevailing tax laws to understand your eligibility.

Can I combine multiple government housing schemes?

Generally, you aren’t allowed to combine benefits from multiple government housing schemes for the same property. However, in some cases, you can combine central and state-level benefits. You should check the lender confirmation and scheme guidelines before applying. 

What is the subsidy under PMAY?

The interest subsidy given to eligible beneficiaries under PMAY ranges from 3% to 6.5% on home loans, depending on income category. The subsidy reduces the effective loan interest and EMI burden. 

Is stamp duty waived in government housing schemes for women?

Stamp duty is not fully waived under central schemes like PMAY. But many state governments offer reduced stamp duty rates for women homebuyers. This encourages women’s ownership and lowers overall property purchase costs.

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