Pradhan Mantri Awas Yojana

In order to meet the housing demands in India and empower communities to own their own home, in June 2015, Ministry of Housing and Urban Poverty Alleviation (MoHUPA) has introduced, an interest subsidy scheme called Credit Linked Subsidy Scheme (CLSS) under Pradhan Mantri Awas Yojana (Urban)-Housing for All, for purchase / construction / extension / improvement of house.

Overview

The honourable Prime Minister of India has announced 'Pradhan Mantri Awas Yojana (Urban) – Housing for All' on 17th June 2015. Under this progressive mission, the Union government eyes to achieve a pucca house for every family in the country by 2022. The Mission has four verticals, namely:

  • Slum Rehabilitation
  • Credit Linked Subsidy Scheme
  • Affordable housing in partner with private & public sectors
  • Subsidy for beneficiary-led individual house construction

Credit Linked Subsidy Scheme (CLSS) is a major division of this Pradhan Mantri Housing Yojana. The Subsidy Scheme applies for Lower Income Group/Economically Weaker Section (LIG/EWS) and Middle Income Group (MIG – I & II). Housing & Urban Development Corporation (HUDCO) & National Housing Bank (NHB) are the two central nodal agencies, responsible for implementing this scheme. These apex government bodies channelize interest subsidy to the lending institutions and the institutions help the eligible applicants to avail the interest subsidy from the government.

What is the maximum interest subsidy under Credit Linked Subsidy Scheme?

The maximum interest subsidy allowed under Credit Linked Subsidy Scheme (CLSS) under Pradhan Mantri Housing Yojana (PMAY) is 2, 67,280.

For Example – Person A applies for a home loan of 20 lakh for a tenure of 20 years at a NBFC at 8.5%. If he is entitled for the subsidy under PMAY, his effective interest rate for home loan would be reduced to 6.61%.

EWS/LIG

Credit Linked Subsidy Scheme – Economically Weaker Section (EWS)/Lower Income Group (LIG)

Household/families earning upto 6 lakh per annum falls under this category. EWS Households having income upto 3,00,000/- and LIG households have an annual income upto 6,00,000/- are eligible under this PMAY scheme.

Case Study of CLSS for EWS/LIG

Example Loan Amount Loan Amount Eligible for Subsidy Interest Subsidy Balance Loan Initial EMI @10% Reduced EMI after crediting the subsidy Monthly Savings Annual Savings
1 3,00,000 3,00,000 1,33,640 1,66,360 2,895 1,605 1,290 15,480
2 6,00,000 6,00,000 2,67,280 3,32,720 5,790 3,211 2,579 30,948
3 10,00,000 6,00,000 2,67,280 7,32,720 9,650 7,071 2,579 30,948

Above figures are indicative and may vary from case to case basis. Source: Ministry of Urban Development.

Salient Features:

  • The maximum interest subsidy is upto 2, 67,280
  • Beneficiaries seeking housing loan from banks and non-banking financial institutions are eligible for an interest subsidy at the rate of 6.5% for 20 years or tenure, whichever is lower.
  • The Credit Linked Subsidy will be available for amounts upto 6 lakhs and any amount beyond 6 lakh will be calculated at normal market interest rate
  • Aadhaar Card is must to leverage the benefits of this PMAY scheme

MIG (I & II)

Credit Linked Subsidy Scheme – Middle Income Group ( I & II)

In order to meet the consequent housing demands, Credit Linked Subsidy Scheme has also been implemented for Middle Income Group people for 1 year with effective from 01.01.2017. Applicants with annual household income between 6-12 lakh in urban areas fall into the MIG I category and 12-18 lakh fall under MIG II category. As on date 31.10.2017, 235 primary lending institutions have signed Memorandum of Understanding (MoU) with central nodal agencies (Source: MOUD)

Case Study of CLSS for MIG I

Example Loan Amount Loan Amount Eligible for Subsidy Interest Subsidy Balance Loan Initial EMI @10% Reduced EMI after crediting the subsidy Monthly Savings Annual Savings
1 6,000,00 6,000,00 1,56,712 4,43,288 5,790 4,278 1,512 18,144
2 9,000,00 9,000,00 2,35,068 6,64,932 8,685 6,417 2,268 27,216
3 12,000,00 9,000,00 2,35,068 9,64,932 11,580 9,312 2,268 27,216

Case Study of CLSS for MIG II

Example Loan Amount Loan Amount Eligible for Subsidy Interest Subsidy Balance Loan Initial EMI @10% Reduced EMI after crediting the subsidy Monthly Savings Annual Savings
1 9,000,00 9,000,00 1,72,617 7,27,383 8,685 7,019 1,666 19,992
2 12,000,00 12,000,00 2,30,156 9,69,844 11,580 9,359 2,221 26,652
3 15,000,00 12,000,00 2,30,156 12,69,844 14,475 12,254 2,221 26,652

Source: Ministry of Urban Development.

Above figures are indicative and may vary from case to case basis. Source: Ministry of Urban Development.

Salient Features:

  • The maximum interest subsidy is upto 2.35 lakh for MIG I and 2.30 lakh for MIG II
  • For MIG I category, there is an interest subsidy at the rate of 4% on home loans for amount upto 9 lakh for 20 years tenure of the tenure of home loan, whichever is lower
  • For MIG II category, there is an interest subsidy at the rate of 3% on home loans for amount upto 12 lakh for 20 years tenure of the tenure of home loan, whichever is lower
  • With the credit of interest subsidy on the beneficiary’s loan account, effective housing loan and EMI reduced there off.
  • Aadhaar Card is must to leverage the benefits of this scheme

Eligibility

The eligibility criteria for both EWS/LIG and MIG group is mentioned below – EWS/LIG –

  • An applicant/family/household should not own a pucca house in any part of the country either in his name or in the name of his any family member. The beneficiary family consists of husband, wife and unmarried children
  • The beneficiary family must not have availed any assistance central/state assistance under any housing scheme from the Government of India
  • In the property ownership, one adult female membership is required
  • The location of the property should fall under all statutory towns as per 2011 census and their adjacent planning area (updated by the government from time to time).
ParticularCLSS – EWS/LIG
Household IncomeUpto 6,000,00
Upgradation of HouseCovered
Subsidy Amount Calculation Tenor20 years (earlier it was 15 years)
Required DocumentsAadhaar of the applicant & co-applicant

MIG -

  • A beneficiary/family/household should not own a pucca house in any part of the country either in his name or in the name of his any family member.In this regard, a beneficiary family comprises husband, wife, unmarried sons and/or unmarried daughters. An adult earning member (irrespective of marital status) can be treated as a separate household.
  • The beneficiary family must not have availed benefits/assistance ever under any housing scheme from Government of India
  • In the property ownership, one adult female membership is desirable
  • The property should fall under the area of statutory towns as per 2011 census and or adjacent planning area (updated by government time to time)
ParticularCLSS – MIG ICLSS – MIG II
Annual household income6,00,001 - 12,00,00012,00,001 - 18,00,000
Dwelling Unit Carpet AreaUpto 90 Sq.mt Upto 110 Sq mt
NOC requirementNot requiredNot required
Tenor for subsidy amount
calculation
20 years20 years
Mandatory DocumentAadhaar of an applicant, co-applicant is requiredAadhaar of an applicant, co-applicant is required
House UpgradationNot requiredNot required

Documents

How you can apply for Pradhan Mantri Awas Yojana?

Subject to eligibility, both whether you are salaried or self-employed, you can avail the benefits on your home loan under PMAY housing for all. We want to make your home loan approval process smooth, so we suggest a list of documents for both salaried and self-employed group.

Salaried Group

Application Form

Identity Proof: PAN Card any of the below documents -

  1. Driving License
  2. Voter Card
  3. Photo Credit Card
  4. Aadhar Card
  5. Valid Passport
  6. body issued photo identity card
  7. Letter from recognized public authority or public servant verifying the identity of the customer with photograph (not more than 1 months old)

Address Proof

  1. Latest Utility bill
  2. Aadhar Card
  3. Voter Card
  4. Rent agreement on stamp Paper
  5. Valid Passport
  6. Life Insurance Policy
  7. Letter from a recognized public authority or public servant verifying the identity and residence of the customer
  8. Bank Statements reflecting address of borrowers of any commercial nationalized bank
  9. Latest card card statement
  10. Residence address Certificate /letter by employer on company letterhead
  11. if owned, copy of Sale Deed of the property (residence),
  12. Municipal or property tax receipt
  13. Account statement of Post Office Savings Account
  14. Letter of allotment of accommodation from employer issued by State or Central Govt. departments, statutory or regulatory bodies, and public sector undertakings, scheduled commercial banks, financial institutions, and listed companies. Similarly, leave and license agreements with such employers allotting official accommodation
  15. Pension or family pension payment orders (PPOs) issued to retired employees by Govt. departments or Public Sector Undertakings, if they contain the address
  16. Documents issued by Govt. departments of foreign jurisdiction and letter issued by Foreign Embassy or Mission in India

Income Proof

  1. Salary slips of last 2 months
  2. Salaried account bank statement for last 6 months
  3. Income Tax Return/latest form 16

Other Required Documents

Running loan documents with repayment bank statement for 6 months

Property Documents

  1. Copy of complete chain documents of the property (as applicable)
  2. Agreement to Sell copy (if executed)
  3. Allotment Letter / Buyer Agreement copy (if applicable)
  4. Copy of Receipt/(s) of payment/(s) made to the developer (if applicable)

Self Employed GroupApplication Form Identity Proof: PAN Card and any of the below documents –

  1. Driving License
  2. Voter Card
  3. Photo Credit Card
  4. Aadhar Card
  5. Valid Passport
  6. body issued photo identity cardLetter from recognized public authority or public servant verifying the identity of the customer with photograph (not more than 1 months old)

Address Proof Any one of the below documents –

  • Voter Card
  • Aadhar Card
  • Valid Passport
  • Letter from a recognized public authority or public servant verifying the identity and residence of the customer
  • Latest Utility bill
  • Rent agreement on stamp Paper
  • Bank Statements reflecting address of borrowers of any commercial nationalized bank
  • Credit Card Statement not older than 3 months
  • Life Insurance Policy
  • Residence address Certificate /letter by employer on company letterhead
  • Copy of Sale Deed of the property (residence), if owned
  • Municipal or property tax receipt
  • Post office saving bank account statement
  • Pension or family pension payment orders (PPOs) issued to retired employees by Govt. departments or Public Sector Undertakings, if they contain the address
  • Letter of allotment of accommodation from employer issued by State or Central Govt. departments, statutory or regulatory bodies, and public sector undertakings, scheduled commercial banks, financial institutions, and listed companies. Similarly, leave and license agreements with such employers allotting official accommodation
  • Documents issued by Govt. departments of foreign jurisdiction and letter issued by Foreign Embassy or Mission in India

Proof of Income All the documents given below –

  1. Running loan statements along with 6 months repayment bank statement
  2. Share holding pattern latest list (duly CA/CS certified)
  3. Memorandum of Understanding for private limited companies
  4. Partnership deed for partnership firms

All of the Property Documents

  1. Copy of complete chain documents of the property (as applicable)
  2. Agreement to sell copy
  3. Allotment Letter/Buyer Agreement (if applicable)
  4. Payment receipt copy (if applicable)

FAQs – Pradhan Mantri Awas Yojana/ Pradhan Mantri Housing Yojana

1. What is the exceptional clause for female ownership in property in EWS/LIG Scheme?

In property structure, an adult female membership is required. When an adult female is not available, the property can be registered in the name of a male member.

2. Please define Household/Beneficiary Family for EWS/LIG and MIG?

Husband, wife and unmarried children constitute the household/beneficiary family for EWS/LIG.

The definition of household/family comprises husband, wife and unmarried children. Irrespective of its marital status, an adult earning member can also be treated as a separate household. This is in case of a MIG category.

3. What all major documents are required to apply for this PMAY housing for all scheme?

Usually, two documents are considered mandatory for applying for this Yojana. These are –

1. Aadhaar Card for all applicants, co-applicants
2. Notarized affidavit cum undertaking

4. In case if an applicant/household already owns a Kuccha house, is he or she eligible for availing subsidy?

As per the mandatory clause, ‘the beneficiary family should not own a pucca house in any part of the country either in his name or in the name of his any family member’.

In this case, the applicant/household owns a Kuccha house, so he is eligible to apply for this scheme.

5. How subsidy will be adjusted?

Subsidy amount shall not be adjusted against tenure. It should be adjusted with the interest, thereby further reducing the EMI only.

6. Is there any topping on property value estimation or area for EWS/LIG and MIG?

For EWS/LIG - There is no tapping on minimum & maximum property value or area. This is laid down in the scheme guidelines, issued by the Ministry of Housing & Urban Poverty Alleviation.

MIG I & II – The maximum area allowed for MIG I & II is upto 90 Sq. mts. and 110 Sq.mts. respectively.

7. Applicant’s wife already owns a pucca house before marriage and now applicant wants to buy one new property in her wife’s name. Can he qualify for a Credit Linked Subsidy?

As spouse in beneficiary family already owns a property, the household cannot take the benefit under CLSS.

8. An applicant is the owner of a plot. However, he does not have the house. Is he is eligible for a subsidy under PM Awas Yojana?

The Scheme outlines, “The beneficiary family should not own a pucca house either in his/her name or in the name of any member of his/her family in any part of India to be eligible to receive central assistance under the mission”

Therefore, if the owner possesses shop, commercial establishment, plot factory, but not owns a factory is eligible for the 1st house ownership.

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