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Affordable Housing Finance

Pradhan Mantri Awas Yojna (PMAY)

15 March, 2018      Affordable Housing


Pradhan Mantri Awas Yojana comes as a respite for these needy homeless peoples to bring some change in their life and increase their social stature. PMAY was launched in June 2015 by our prime minister Narendra Modi.

Pradhan Mantri Awas Yojna ( PMAY )


India is home to almost 17% of the world's slum dwellers and this slum owner are in a constant search to bring change in their life which prompted these slum dwellers and low earning people to shift to the bigger town or city to earn their livelihood. Educated and professionals are shifting to metros cities for more career opportunities and so do students for their higher studies and generally, they are ending up in settling outside. All these reasons have led to a phenomenal increase in the population of urban areas in last few years. This population growth has increased the demand for a home to live in. Pradhan Mantri Awas Yojana comes as a respite for these needy homeless peoples to bring some change in their life and increase their social stature. PMAY was launched in June 2015 by our prime minister Narendra Modi. The Government's vision to bring India under the umbrella of pucca houses with running water facilities, proper hygiene and 24/7 electricity supply can be accomplished through PMAY. It is a landmark programme which is working in many fields for making homeownership accessible to all income groups. This multidimensional scheme is working in many fields firstly it is aiming to transform slums into concrete buildings with the help of private developers, secondly, it is working on credit-linked subsidy scheme which aims to empower weaker and mid-income sections to avail loans at a subsidized rate for constructing of new home or renovation of existing homes. The scheme shows us the far-sighted vision of our prime minister who is adamant to change the lives of the poor, it would not be an exaggeration if we call Pradhan Mantri Awas Yojana as Modi home loan.This scheme is a further boon for the affordable housing segment which is the future of real estate.

Guidelines for availing the Pradhan Mantri Awas Yojana

People who are willing to avail a home or financial support from the government under this scheme should meet certain eligibility requirements. Potential applicants should fall into these groups:-

1. The Economically Weaker Section (EWS)

Families with an annual household income that is less than INR 3 lakh fall under this category.

2. Light Income Group (LIG)

Families or individuals with an annual household income above INR 3 lakh but below INR 6 lakh are considered to fall under the light income group.

3. Medium Income Group (MIG1 & 2)

Individuals or families with an annual household income of INR 12 lakh fall under the category of MIG1. For individuals and families with an annual household income between INR 12 and INR 18 Lakh, there is a category known as MIG2.

Before taking the PMAY loan the purchaser should keep in mind that previously they should not hold any house under the name of purchaser or their family member.

Under the provided guidelines the purchased house carpet should be less than 60 sq. mtrs. for income not exceeding 6 lacs rupees per annum. and the people who are earning less than Rs 9 lac p.a. carpet area should not exceed 90 sq.mtrs. and 110 sq. mtrs. for the people who earn less than 18 lacs p.a. 


6.5 percent of subsidy is given to the loan amounts up to rs 6 lakh, who comes under EWS group with income under Rs 6 lakh p.a, furthermore people earning up to Rs 12 lakh p.a. will be able to avail 4 percent interest as a loan subsidy but the loan amount should not exceed rs 9 lakh, and people whose annual income is upto rs 18 lakh per annum will get a 3 percent subsidy on a loan amount of rs 12 lakh. Any loan amount which is above the aforesaid amount will get teh loan at the non subsidized rate. In the above mentioned slabs PMAY will apply to loans with a tenure of upto 20years.

How to avail PMAY subsidy?

For availing the subsidy under the Pradhan Mantri Awas yojana you have to apply for the home loan from any Bank or NBFC whichever you find best as per your requirement. Meanwhile, if you found to be eligible your application will be forwarded to Central nodal agency and after the approval of CNA, the subsidy amount will be transferred to the particular lender who lended you the money.

Subsidised loans from where

Pradhan Mantri Awas Yojana loan or Modi home loan can be taken from any primary lending institution like scheduled commercial banks, Regional Rural Banks s), State Cooperative Banks, housing finance companies Urban Cooperative Banks, Small Finance Banks, Non-Banking Financial Company etc.These banks and institutions cannot charge any processing fee on any loan amount which is mentioned under the scheme.

In everybody's life there is a dream of owning a house, and if you are planning to purchase or construct your home in near future than Pradhan Mantri Awas Yojana is the smart advice which you can opt for.