The central government has announced a significant subsidy of 4% on home loans for individuals planning to buy a house, purchase a resale property, or construct a home after September 1, 2024. This scheme will be available for a period of five years, offering a great relief to aspiring homeowners. It is part of the second phase of the Pradhan Mantri Awas Yojana – Urban (PMAY-U), launched to fulfill the government’s vision of ‘Housing for All’ by providing permanent, all-weather homes to eligible families.
Who Can Avail the Subsidy Benefits?
The government aims to assist specific income groups under this scheme. Families falling under the EWS (Economically Weaker Section), LIG (Low-Income Group), and MIG (Middle-Income Group) categories living in urban areas are eligible for the home loan subsidy. The income criteria for availing benefits are as follows:
- EWS: Annual income up to Rs 3 lakh
- LIG: Annual income up to Rs 6 lakh
- MIG: Annual income up to Rs 9 lakh
Applicants with an annual income exceeding Rs 9 lakh are not eligible. EWS families with an annual income of up to Rs 3 lakh can receive financial assistance of up to Rs 2.5 lakh to build a new pucca house with a maximum area of 45 square meters on their existing land.
Who Is Not Eligible for the Scheme?
Certain conditions must be met to qualify for the second phase of the PMAY-U scheme. Individuals will not receive the benefits if:
- They or their family have already been allotted a house under any central, state, or local government housing scheme in urban or rural areas within the last 20 years.
- They are currently availing benefits from any other government housing scheme.
- Their housing unit was sanctioned under PMAY-U but later canceled by the Central Sanctioning and Monitoring Committee (CSMC) after December 31, 2023, on the recommendation of state or union territory authorities.
Key Components of the PMAY-U Scheme
The Pradhan Mantri Awas Yojana (PMAY-U) offers subsidies under four distinct verticals, from which applicants can choose based on their housing needs:
- Beneficiary-Led Individual House Construction
- Affordable Housing in Partnership (AHP)
- Affordable Rental Housing Complexes (ARHCs)
- Credit-Linked Subsidy Scheme (CLSS)
Beneficiaries under the Credit-Linked Subsidy Scheme (CLSS) can receive an interest subsidy of 4% on a home loan of up to Rs 8 lakh for a maximum tenure of 12 years. If the house value is Rs 35 lakh and the loan is up to Rs 25 lakh, the subsidy can significantly reduce the repayment burden.
Special Support for EWS Beneficiaries
The PMAY-U scheme particularly benefits EWS families by offering financial support for the purchase of affordable housing. Public and private developers construct houses with a carpet area ranging from 30 to 45 square meters. Eligible EWS beneficiaries can avail financial aid of up to Rs 2.5 lakh per unit towards the property cost under AHP projects. This assistance is jointly provided by the central and state governments, making it the most affordable housing scheme for economically weaker sections.
