Things to know about PMAY: PMAY Home loan subsidy

Pradhan Mantri Awas Yojana | Home loan benefit

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Home loan subsidy

Summary – Apply Home loan subsidy under PMAY | Home loan subsidy Eligibility | Procedure | Features & Benefits | Subsidy Amount Available

If you are set to buy a new house, you must consider PMAY – Pradhan Mantri Awas Yojana which provides many monetary benefits and relaxation to the new home buyers. As I have availed this subsidy I would share my experience in terms of time taken, procedure and documents needed to avail this benefit but before landing into all this let’s first see what is PMAY.

Pradhan Mantri Awas Yojana (PMAY)

It comes under Credit Linked Subsidy Scheme which is a government scheme launched with a solo purpose to make buying your first home easier especially for the sections below :

  • Economically Weaker Section (EWS)
  • Low Income Group (LIG)
  • Middle Income Group 1 (MIG-1)
  • Middle Income Group 2 (MIG-2)

Link : https://pmaymis.gov.in/

Basic Eligibility parameter to avail PMAY

  • The beneficiary family should not own any Pucca house across India in the name of any its family member and should not have benefited under any government housing scheme which also includes PMAY.
  • The beneficiary family includes a Husband, Wife and unmarried children. Also a member of the family who is adult and earning can be treated as a separate entity in MIG category .
  • In case of the married couples, either one of them or both together in joint ownership will be eligible for single subsidy.
  • Home loan buyers, who availed any government housing scheme including PMAY cannot avail it even if they change/migrate their loan to any other bank.
  • As we say now a days, Aadhaar is must. It is must here as well and the beneficiary family need to provide their Aadhar identity to the lender bank.
  • Income criteria decides under which section one falls to avail this benefit.

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Income criteria eligibility parameter to avail PMAY

Note :
1 sq. mts = 10.7639 Square foot (For Calculation purpose) 

  • Economically Weaker Section (EWS) and Low Income Group (LIG)
  1. Eligible Family Income : This brackets the section/group one falls depending upon the annual income.

    EWS : Should have maximum up to Rs 3 lakh annual income.
    LIG : Annual income should fall in between Rs 3 lakh and 6 lakh.
  2. Carpet Area : The carpet area of the house should be maximum up to

    EWS : 30 sq. mts
    LIG : 60 sq. mts
  3. Woman Ownership : Woman ownership(sole or joint) is must if there are woman in the family. This condition is not applicable and can be solely in the name of male member either if there are no adult female member in the family or it is taken for construction.
  • MIG (1 & 2)
  1. Eligible Family Income : This brackets the section/group one falls depending upon the annual income.

    MIG-1 : between Rs 6 lakh and 12 lakh
    MIG-2 : between Rs 12 lakh and  18 lakh
  2. Carpet Area : The carpet area of the house should be maximum up to

    MIG-1 : 160 sq. mts
    MIG-2 : 200 sq. mts
  3. Woman Ownership : Here the woman ownership is not mandatory.

Example : we will take an example to understand how one falls under these sections or category.

Suppose a Person named as “ABC” has a property for construction or buying with a carpet area as 35 sq. mts in city Muzaffarpur, Bihar (this applies to any individual residing in any city across India) and he earns 7 lakh annually, so under which category he fits in ?

As ABC has a carpet area of 35 sq. mts so he should come under LIG group but again considering his annual income he doesn’t fits into the LIG section, so he will go into MIG-1 section as his carpet area is under 160 sq.mts and annual income to fits in the permissible range for MIG-1which is 7 lakh.

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PMAY – Scheme details

  • EWS/LIG – Features & Benefits

ParticularsEWSLIG
Eligible annual household incomeUpto Rs. 3 lakhBetween Rs. 3 lakh and Rs. 6 lakh
Carpet area (max.)30 Sq. mt.60 Sq. mt.
Subsidy calculated on a max. loan ofRs. 6 lakhRs. 6 lakh
Interest subsidy (% p.a.)6.50%6.50%
Subsidy amount (max.)Rs. 2.67 lakhRs. 2.67 lakh
Maximum loan tenure (in years)20 yrs.20 yrs.
Discount rate to calculate Net Present Value (NPV) of the interest subsidy9%9%
Woman OwnershipMandatory (except for loan availed for construction)Mandatory (except for loan availed for construction)
Validity of the scheme31 March 202231 March 2022
Applicability to loansLoans approved on/after 01/01/2017Loans approved on/after 01/01/2017
EWS/LIG – Features & benefits
  • MIG-1/MIG-2 – Features & Benefits

ParticularsMIG-1MIG-2
Eligible annual household incomeRs. 6-12 lakhRs. 12-18 lakh
Carpet area (max.)160 Sq. mt.200 Sq. mt.
Interest subsidy (% p.a.)4%3%
Maximum loan tenure (in years)20 yrs.20 yrs.
Subsidy calculated on a max. loan ofRs. 9 lakhRs. 12 lakh
Subsidy amount (max.)Rs. 2.35 lakhRs. 2.30 lakh
MIG-1/MIG-2 – Features & benefits

Procedure to apply for PMAY subsidy benefit

  • The above subsidy process starts once the house loan is dispersed from bank lender to you.
  • The lender bank sends out the details collected from you to National housing bank (NHB).
  • NHB authority then after examining the shared details approve/rejects the requests.
  • The approved subsidy amount which depends upon the Group/section one falls in, reflects in the online portal of your loan account and is deducted from the Principal amount taken from the lender bank. So on approval you need to pay loan interest on remaining amount [Principal amount taken – Approved subsidy amount].
  • One important aspect is how much times does it takes post the application for subsidy, From my experience it would taken in between 6 to 12 month. In my case it took me 13 months. Since pandemic corona has affected everything now a days it might take a little long now a days.
  • Documents required : The best way to have a crystal clear idea on this is to communicate with the lender bank home branch from which the house loan is taken. If I take the example of HDFC you would need a sample request form for subsidy consisting of 4 pages, which needs to be prepared  on 100 Rs India non judicial stamp paper which is easily available in your city where government notary work happens, Aadhaar card xerox copy of loan borrower and co-borrower if any.
  • The request form prepared on 100 Rs India Non judicial stamp paper, need to be filled dully as per the attached images, borrower and coborrower needs to sign at bottom of each page. Also on page no : 4, two witness are also required which could be any even neighbour.
  • A Photograph of the property or construction site in background along with borrower and co borrower in front. Do make this photograph attested as well from the Notary office while making above request form.
  • A copy of Aadhaar card from each one of borrower and co borrower.
  • Again I would add wherever you feel any doubt please do get it crisp clear from the bank home branch.


Please post your query if any and do like it if that helps.

SUBSIDY Benefit

Stamp paper
Contd.
Contd.
Home loan subsidy
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