Benefit of PMAY (Pradhan Mantri Awas Yojana) For EWS and LIG
Monday, 24 September 2018

The Government of India has been working hard to realize its mission of ‘Housing for All by 2022’. In fact, the Prime Minister’s plan to provide housing for all by 2022 is set to boost the economy by $1.3 trillion, create 60 million new houses and over 2 million jobs every year.

In order to make housing accessible to all, the government has devised two schemes to fund the interest of the borrowers in urban areas. The first scheme, which pertains to interest rate subsidy, is applicable to the Economically Weaker Sections (EWS) and the Low-Income Group (LIG). The other scheme is for the Middle-Income Group (MIG).

The Pradhan Mantri Awas Yojana (PMAY) provides interest rate subsidies to EWS and LIG individuals. Here’s all you need to know about the eligibility criteria and the disbursal process for the home loans under the scheme.

    1.Eligibility

The eligibility criteria are different for the two groups—EWS and LIG. To be eligible for the subsidy, the applicant (or spouse) should not own a ‘pucca’ house in his/her name or in an unmarried child’s name in any part of India. For the EWS group, the total annual income of the family should not be more than Rs. 3 lakhs, and for the LIG, it can be above Rs. 3 lakhs but under Rs. 6 lakhs. To avail the subsidy, the applicant must submit to the lender a self-declaration of total family income and the title of the property to be acquired. The property can either be an independent unit or a single unit in a multistoreyed building. However, the size of the property is restricted to a carpet area of up to 30 square metres for EWS and up to 60 square metres for LIG. The property must be equipped with basic infrastructure, such as water, electricity, toilets, paved roads, sewerage, etc.

    2.Disbursal of subsidy:

The eligibility criteria for EWS and LIG vary on the counts of annual family income and size of the property. However, the details of the subsidy provided remain the same for the two groups and are as follows:

  • Rate of interest subsidy: 6.50% ·
  • Maximum loan eligible for subsidy: Rs. 6 lakhs ·
  • Maximum loan tenure: 20 years

The subsidy under this scheme is given as upfront relief, in the form of a reduction in the overall loan liability.

    3.No processing fee for loan:

Under the PMAY scheme, lenders are not allowed to charge a processing fee from the borrower. In addition to the subsidy amount that will be reimbursed to the lender, a sum of Rs. 3,000 will also be provided in order to compensate for the processing fee. In case, the loan is for more than Rs. 6 lakhs, then the lender is allowed to charge the regular processing fee.

The Pradhan Mantri Awas Yojana has come as a blessing for aspirant homeowners all over India, and it is a promising step towards the ‘Housing for All by 2022’ mission.

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