Is Pradhan Mantri Awas Yojana (PMAY) for you?

Mumbai: Under the Housing for All scheme, Pradhan Mantri Awas Yojana is categorised into two parts: Pradhan Mantri Awas Yojana-urban (PMAY-U) and Pradhan Mantra Awas Yojana-gramin or Rural (PMAY-G).

PMAY aims at providing a pucca house by 2022. Under PMAY-U, around 65.43 lakh houses have been sanctioned, of which 35.49 lakh are grounded for construction, 12.26 lakh houses are completed and 12.19 lakh houses are occupied, as of 3 December. Under this, Gujarat tops the list of states, with 1.63 lakh houses occupied, followed by Madhya Pradesh, with the completion of 1.55 lakh houses.

You are eligible for interest rate subsidiary under PMAY-U if you do not own a pucca house anywhere in India and belong to one of the eligible categories. These could be the economically weaker section (EWS) with an annual household income up to ₹ 3 lakh per annum, lower income group (LIG) with the annual household income between ₹ 3 lakh and ₹ 6 lakh, middle income group -1 (MIG-I) with household income between ₹ 6 lakh and ₹ 12 lakh, or middle income group-ii (MIG-II) with a household income between ₹ 12 lakh and ₹ 18 lakh.

All categories are eligible for credit linked subsidy scheme (CLSS), an interest subvention on home loans taken by eligible urban poor for acquisition, construction or enhancement of house. The subsidy is credited to the loan account of the beneficiaries through lending institutions.

Under PMAY-G, 60.90 lakh houses have been completed under as of 13 December, according to a progress report published by the ministry of rural development on its website. The minimum size of the house is 25 square metre with a hygienic cooking space.

PMAY-G selects beneficiaries using housing deprivation parameters in the Socio Economic and Caste Census (SECC), 2011, which is verified by the Gram Sabhas. Households that are houseless and living in houses with up to two kuccha walls and kuccha roof houses will be segregated. Parameters reflecting housing depravation are assigned priority.

Within the priority list, an upper hand is given to those who receive a high score on the following parameters: households with no adult member between ages 16 and 59, female-headed households with no adult male member between ages 16 and 59, households with no literate adult above 25 years, households with any disabled member and no able-bodied adult member, and landless households deriving major part of their income from manual casual labour.

What you get

If you are eligible for the interest rate subsidy under PMAY scheme, the bank will claim it from the National Housing Bank (NHB) for your loan.

According to the ICICI Bank website, “The NHB will conduct a due diligence to exclude claims where customer has submitted multiple requests. For all eligible borrowers, the subsidy amount will be paid to the bank. Once the bank receives the interest subsidy, it will be credited upfront to the loan account. The subsidy will be calculated on net present value (NPV) at 9% discount rate. For example, if the borrower avails a loan of ₹ 8 lakh and the subsidy works out to ₹ 2.20 lakh, this amount would be reduced upfront from the loan. The borrower would pay EMIS on the reduced amount of of ₹ 5.80 lakh.”

Interest rate subsidies are available only up to a limit.