Reading Time: 5 Minutes
Reading Outcome: At the end of this article, you will be able to clearly understand the the PMAY scheme is and how you can benefit if you act now
Buying a home? Have you claimed your PMAY cheque from the Government? If not, then its time for you to know the golden benefits of this scheme in fulfilling your home buying needs
What is the PMAY Scheme?
Commonly, known as the Pradhan Mantri Awas Yojana it is a unified scheme intended to make housing dreams come true for all. It is also a one of a kind financial aid system, which provides housing loans to economically disadvantaged people with a hassle-free approach.
How is the scheme beneficial?
For a lot of us, owning our dream property always remains a challenge. In addition, fluctuating economic trends, increasing commodity price, and alarming construction charges make it even more challenging to achieve it! But, with the PMAY scheme, addressing the above issues is simple and easy. Not alone that, the scheme also plays a key role in addressing issues like,
• Demand-supply in equilibrium.
• Slum rehabilitation and urban development.
• Affordable housing options for people belonging to Lower Income Group.
What are the salient features?
Unlike the other Government schemes, the PMAY scheme has an integral approach.
1. Categorization: PMAY scheme has come up with certain guidelines keeping the housing needs of the common people. Also, to empower the nation in its overall economic development.
A. Economically Weaker Section:
EWS refers to the segment of people who receive an annual income of INR 3 Lakhs to INR 6 Lakhs as his or her overall income.
Conditions to apply under the Economically Weaker Section:
Any applicant applying under this segment must qualify the following conditions so as to become eligible for the subsidy:
•Applicant or any beneficiary should not own any pucca house while applying for the subsidiary.
•The maximum subsidy one can receive is 2.67 lakhs for an enhanced purchasing power. The fixed interest subsidy is 6.5%* for 20 years tenure or lower than that.
Besides that, the applicant is also required to co-own the house with one female member of the family at the time of nomination.
Important Terms for Economic Weaker Sections
1. Female Ownership: Though a mandated requirement, female property ownership is not required in cases of a home renovation or any other up-gradation activities
2. Family: The term family refers to husband, wife, unmarried sons and/or unmarried daughters.
3. Carpet Area: The carpet area of the house under these Schemes should up to 30 sq. mts. for EWS beneficiaries
4. Availability and Usage: This scheme is valid for the acquisition/construction of the house and repair/extension of Kucha/Semi Pucca house.
B. Middle Income Group-1:
Under the PMAY, Middle Income Group is referred to as the second segment of people who receive an annual income of INR 6 Lakhs to 12 Lakhs as their annual income.
Conditions to apply under the Middle Income Group:
• The applicant 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 at the time of self-nomination.
• The property should fall under all statutory towns as per the 2011 census and or adjacent planning area (updated by government time to time).
• The credit linked subsidy @ 4% will be available for loan amount up to Rs.9 lakhs in the case of MIG-I. However, the Banks can sanction Home Loans more than Rs.9 lakhs but the subsidy will be restricted to Rs. 9 lakhs only.
• Though the Loan tenure is 20 years, banks can sanction loans for a maximum tenor of 30 years but the loan has to be repaid before the borrower attains the age of 70 years.
Important Terms for Middle Income Group- 1
1.Female Ownership: Though female ownership is desirable, case of the married couple, either of the spouses or both together in joint ownership will be eligible for a single house subject to income eligibility of the household under the scheme
2. Family: Family refers to husband, wife, unmarried sons and/or unmarried daughters.
3. Carpet Area: The carpet area of the house under this Scheme should be up to 120 sq. mts. (1292 sq ft) for MIG-I beneficiaries.
4. Availability and Usage: This scheme is valid for Repair and Renovation.
C. Middle Income Group -2:
The scheme was initially targeted towards the economically disadvantaged people. In recent times, the PMAY scheme has been extended to the third income group earning 12 lakhs per annum on the following grounds.
• The applicant and his/her associated beneficiary should not be an owner of a pucca house or any other home at the time of applying the subsidy.
• The applicant should not have availed any central/state assistance under any housing scheme from the Government of India ever.
• The credit linked subsidy @3% for Rs 12 lacs in case of MIG-II. However, the Banks can sanction Home Loans more than Rs.12 lakhs but the subsidy will be restricted to Rs.12 lakhs only.
• The loan tenure is 20 years. However, Banks can sanction loans for a maximum tenor of 30 years but the loan has to be repaid before the borrower attains the age of 70 years.
Important Terms for Middle Income Group- 2
1. Female Ownership: Adult female membership ownership in the property is desirable. An adult earning member (irrespective of marital status) can be treated as a separate household and can avail subsidy independently. In the case of a married couple, either of the spouses or both together in joint ownership will be eligible for a single house subject to income eligibility of the household under the scheme.
2. Family: Family means husband, wife, unmarried sons and/or unmarried daughters.
3. Carpet Area The carpet area of the house under this Scheme up to 150 sq. mts. (1614 sq ft) for MIG-II beneficiaries.
4. Availability and Usage: The scheme is applicable for repairs and renovation.
How to avail of the scheme?
Steps to avail the PMAY Scheme
1. First, book an apartment and apply for a home loan.
2. Upon submitting the document, the bank evaluates your claims and sanctions it accordingly.
3. Post the claims and loan sanctions, your housing agreement gets registered and procedures corresponding to it begins.
4. Your bank/ chosen finance company will submit the claim to the National Housing Bank for processing and other documentation procedures.
5. NHB (National Housing Bank) will transfer the subsidy to your bank in a timely manner.
6. Bank will deposit the subsidy to your loan account in accordance with your strand and category.
7. Loan reduces to the level of subsidy received and the reduced EMI is set for paying them at your convenience.
India has seen enormous leaps in development in the past few decades; and while there is a luxurious mansion for the rich, the poor still do not have the means and access to a decent home To change this difference in a democracy, PMAY is scheduled to make the lives of rich and moderate people to balance in an even manner. This scheme is popular in Chennai where the real estate sector started to focus on affordable housing projects in Guduvanchery, Padur, OMR, etc.