Union Budget 2019: By 2022, 1.95 Crore Houses to be Built Under PMAY
While presenting the Union Budget 2019, Finance Minister Nirmala Sitharaman announced that over the subsequent two financial years, i.e. during 2020 – 2022, 1.95 crore houses would be constructed under the aegis of Pradhan Mantri Awas Yojna (PMAY).
In June 2015, Mr. Narendra Modi, the Prime Minister of India, launched the Pradhan Mantri Awas Yojana (PMAY). The scheme was introduced to provide affordable housing via an affordable Home Loan for Low-Income Groups and to people who belong to economically weaker sections. The PMAY proposes to build 2 crore houses within 2022 for both urban and rural population of India. The government plans to build ‘pucca’ houses with sanitation, electricity supply, and water facilities. The scheme also emphasizes transforming of slum areas by constructing homes for slum dwellers in partnership with private developers. PMAY also envisages offering a Credit-Linked Subsidy to the economically weaker sections on loans availed for construction of new homes or renovation of existing homes.
PMAY Scheme Eligibility Criteria
To extend transparency and to ensure that only the deserving candidates get the benefits of this scheme, the government of India is using SECC-11 for the identification and selection of eligible candidates. Before the final list is prepared under the rural housing scheme, a discussion is held with the village panchayats along with the tehsils about the beneficiaries.
- An Indian family with an annual income between Rs. 6 Lakh to Rs. 18 Lakh will be eligible to apply for the Pradhan Mantri Awas Yojana (PMAY) scheme.
- Candidates who own a house already aren’t eligible for the PMAY scheme.
- Women are also eligible to apply if they are citizens of India.
- Candidates are allowed to buy newly constructed houses only. The benefits of the PMAY Scheme cannot be availed on previously constructed houses.
- Economically weaker sections, i.e., the lower-income group, can apply for PMAY scheme.
- Candidates belonging to scheduled castes and scheduled tribes are also eligible for availing the PMAY scheme.
Loans under Pradhan Mantri Awas Yojana (PMAY)
Benefits under the PMAY are available to borrowers if they wish to buy a new house from the builder or developer directly or from the secondary market through repurchase PMAY. Candidates are eligible for a loan to construct a new house as well. Eligible candidates can avail avail PMAY Credit-Linked Loans from any primary lending institutions such as scheduled commercial banks, housing finance companies, regional rural banks, state cooperative banks, urban cooperative banks, small finance banks, non banking financial company etc without any processing fee for the eligible Housing Loan amount as per income criteria under the scheme. However, lenders can charge the normal processing fee on additional loan amounts beyond the eligible loan amounts for interest subsidy.
Pradhan Mantri Awas Yojana (PMAY) Interest Subsidy
Candidates applying from urban areas as well as rural areas are eligible for the benefits under the PMAY-U scheme. The eligible candidates are further divided into two slabs, namely MIG – I and MIG – II. MIG stands for Middle Income Group. The candidates in the MIG – I and MIG – II category are eligible for the Credit Linked Subsidy Scheme (CLSS). Households with an annual income of Rs. 6,00,001 up to Rs. 12,00,000 fall under the MIG – I slab and households with an annual income of Rs. 12, 00,001 up to Rs. 18, 00,000 fall under the MIG – II slab.
- The eligible loan amount for interest subsidy for the MIG – I is Rs. 9 Lakh with 4% interest subsidy and NPV subsidy of Rs. 2.35 Lakh.
- The eligible loan amount for interest subsidy for the MIG – II is Rs. 12 Lakh with 3% interest subsidy and NPV subsidy of Rs. 2.30 Lakh.
For example, if an individual falls in the MIG – II category and intends to purchase a house costing Rs. 60 Lakh, they can seek the benefit. The compulsory down payment of 20%, i.e., Rs. 12 Lakh should be made by the borrower and the remaining amount of Rs. 48 Lakh can be arranged through a loan. Though, under PMAY, a subsidy of 3% would be applicable till Rs 12 Lakh, hence, the interest rate chargeable by the lender on Home Loan will be applicable only on the balance amount of Rs. 36 Lakh.
The application process for Pradhan Mantri Awas Yojana (PMAY)
The application process for availing the benefits under the PMAY is straightforward. You can complete the process through online or offline channels as per your convenience. Following are the steps involved in the application process for PMAY:
Step 1: The first step is to apply for a Home Loan from any bank that best suits your requirements and provides the subsidy (Almost all nationalised and private banks offer home loans under PMAY like HDFC Home PMAY Home loan, SBI Home loan, etc.).
Step 2: You can either apply online through the official website of PMAY, or if you wish to opt for the offline process, all you have to do is make a visit to the nearest branch of a PMAY Yojana listed bank along with your income proof, KYC documents and submit the subsidy scheme application form.
Step 3: Then, your application will be forwarded to CNA if found eligible.
Step 4: If your application gets approved, the subsidy amount will be sent to the lender by the CNA.
Step 5: This subsidy amount will now be credited to your Home Loan account, decreasing the total principal amount of your Home Loan.
Steps to apply for Pradhan Mantri Awas Yojana (PMAY) Online are as follows
Step 1: Visit the official website of PMAY and login to PMAY-HFA (Urban).
Step 2: Select the ‘Citizen Assessment’ option located towards the top of the menu bar.
Step 3: Now, in the drop-down menu, you’ll see two options. Select Benefit under the other 3 components.
Step 4: You will be asked to enter your Aadhar details which you must enter to proceed ahead with the application process.
Step 5: Enter all the details as required in the application form correctly.
Step 6: Now hit the Save/ Submit option, print the application, and note down the application number for tracking the status later on.
With so many benefits on offer, Pradhan Mantri Awas Yojana is a boon for all prospective homeowners who needed a pocket-friendly means of finance. If you are also eligible under the PMAY, you should also consider applying and realise your dream of becoming a homeowner.
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