PMAY: How to Get Home Loan Subsidy

The primary eligibility for availing the benefit of PMAY scheme is not having the ownership of any house property. The criterion also applies to the family members of the beneficiary.

Pradhan Mantri Awas Yojana is a housing for all initiative through which the beneficiaries get a direct subsidy on their home loan interest rates. The family members of the recipient, i.e., husband, wife, and unmarried children should also not own a house. For married couples, both the spouses are eligible for a common home loan subsidy. However, if someone has already availed the benefit under a government scheme on an earlier point of time, they are not eligible for the home loan subsidy.

Pradhan Mantri Awas Yojana scheme classifies its applicants into three categories. The first category is of Lower Income Group (LIG), those who have an annual income up to Rs. 6 lakhs. Then, there is Middle Income Group-1 (MIG-1), who have a yearly income from Rs. 6 lakhs to Rs. 12 lakhs. Finally, those with annual income up to Rs. 18 lakhs fall under Middle Income Group-2 (MIG-2). The home loan subsidy eligibility criteria are different for these groups.

Subsidized interest rates and the loan amount

  • The floor area of the planned house property should be between 60 square meters to 200 square meters, depending upon the income group of the beneficiary.
  • Also, the interest rate subsidy varies between 3% and 6.5%. The interest rates are decided upon the loan amount, which ranges from Rs. 6 lakhs to Rs. 12 lakhs.
  • For example, the Economically Weaker Sections and Lower Income Groups can get a subsidized interest rate of up to 6.5% for a maximum loan amount of Rs. 6 lakhs. Notably, none of the beneficiaries is eligible to get a subsidized interest on the total loan amount, i.e., amount excess of Rs. 12 lakhs.
  • The maximum loan tenure under the scheme is 20 years or the loan tenure decided by the beneficiary (less than 20 years). There is no pre-decided threshold on the total loan amount or the size of the house, but the interest rate subsidy is only available up to a limit.

The process of subsidy disbursement

  • Once the loan has been sanctioned, details of the beneficiary are verified by the concerned agency.
  • After the required verifications are done and the home loan subsidy eligibility criteria are met, the financial institution which has disbursed the loan claims the subsidy on behalf of the beneficiary.
  • Once that gets cleared, the amount is cleared to the financing body, and then it is credited to the home loan account of the beneficiary. After the process is complete, the monthly installments start dipping accordingly.
  • For getting the benefit of Pradhan Mantri Awas Yojana home loan subsidy under EWS and LIG groups, it is mandatory for the property to be owned by the woman head of the family.

In the case of Middle-Income Groups, the beneficiaries are required to submit their numbers. Those who have already availed the benefit of a Government housing scheme are not eligible for the PMAY housing scheme.