3 min read
25 May 2021

To extend the benefits of affordable housing to the weaker sections of the urban population, the government has introduced Pradhan Mantri Awas Yojana-Urban, also known as PMAY-Urban. This scheme considers four income groups: Medium income group-I (MIG-I) and Medium income group-II (MIG-II) as well as Economically Weaker Section (EWS) and Lower Income Group (LIG). Besides, PMAY has 4 verticals in urban areas that include:

  • In-Situ Slum Redevelopment (ISSR)
  • Credit Linked Subsidy Scheme (CLSS)
  • Affordable Housing in Partnership (AHP)
  • Beneficiary-led Construction (BLC)

To enjoy the benefits of this scheme and to make urban living more affordable, you must understand the nuances of Pradhan Mantri Awas Yojana - Urban. Take a look at how you, as an urban resident, can get a house of your own with PMAY-Urban

Evaluate if You are Eligible

As per the terms of PMAY Urban eligibility, first you must meet the income criterion, which is different for different groups.

  • If you want to apply as a member of EWS, your income must be less than Rs. 3 lakh.
  • If you want to apply as someone belonging to LIG, your income must be between Rs. 3 lakh and Rs. 6 lakh.
  • To qualify as a MIG-I beneficiary, your annual income should be between Rs. 6 lakh and Rs. 12 lakh.
  • To qualify as a MIG-II beneficiary, you must draw an income between Rs. 12 lakh and Rs. 18 lakh.

Once you qualify on the basis of your income, you can proceed to check the other requirements for PMAY Urban. Note that if you fall under the EWS or LIG category, you will have to provide proof of your income too. Another important thing to remember is that the government will deem your Pradhan Mantri Awas Yojana application invalid in case you, or anyone from your family, own a pucca house in India. Moreover, in case any member has subscribed to another government housing scheme, you cannot avail benefits of PMAY. You can qualify as a beneficiary family if yours comprises of you, your spouse and unmarried children.

PMAY Urban benefits

The Pradhan Mantri Awas Yojana (PMAY) Urban is a housing initiative launched by the Government of India with the aim of providing affordable housing for urban dwellers. The scheme focuses on ensuring that every citizen has access to a pucca house with basic amenities. Here are some of the key benefits of the PMAY Urban scheme:

  1. Subsidised interest rates: Beneficiaries of the PMAY Urban scheme are eligible for interest subsidies on home loans. The extent of the subsidy depends on the income category of the beneficiary.
  2. Credit-Linked Subsidy Scheme (CLSS): The CLSS under PMAY Urban provides interest subsidies on home loans to eligible beneficiaries. The scheme is categorized into three components based on income: Economically Weaker Section (EWS), Low-Income Group (LIG), and Middle-Income Group (MIG).
  3. Affordable housing finance: The scheme encourages financial institutions to provide housing finance at affordable rates, making it easier for individuals in the EWS, LIG, and MIG categories to secure housing loans.
  4. Incentives for women ownership: The scheme promotes women's ownership of houses, and preference is given to households where the property is registered in the name of a woman.
  5. Preference for vulnerable and marginalised groups: Special provisions are made to cater to the housing needs of vulnerable and marginalized groups, including senior citizens, transgender individuals, and people with disabilities.
  6. Technology use and transparency: PMAY Urban emphasizes the use of technology for effective implementation and transparency. The process involves the use of GIS technology for project planning and monitoring.
  7. In-situ slum redevelopment: The scheme includes provisions for the redevelopment of existing slums through the in-situ approach, which involves the redevelopment of slums on the same land while providing better amenities to residents.
  8. Mission cities and towns: PMAY Urban is implemented in various cities and towns across the country, aiming to address the housing needs of urban populations.
  9. Participation of private sector: The scheme encourages the participation of private developers and promotes public-private partnerships to boost the construction of affordable housing units.
  10. Beneficiary-led construction: The scheme allows beneficiaries to build their own houses under the "Beneficiary-led Construction" component, giving them more control over the construction process.

Check if the House You are Planning to Buy Qualifies

To enjoy the PMAY scheme, the house that you are planning to buy should be one from the list of affordable housing projects as certified by the Indian Government. As per the Housing for All (PMAY-Urban) Scheme’s guidelines, only those projects where at least 35% of the houses are constructed for economically weaker sections (EWS), and have at least 250 units, are considered to be affordable housing projects.

Apart from this, you need to fulfill area requirements based on your income eligibility slab. To avail this scheme, carpet area for MIG-I is up to 120sq.m. and for MIG-II is up to 150sq.m. For EWS, this limit is 30sq.m. and for LIG, it is 60sq.m.

Get a Home Loan to Claim Subsidy

You can also claim interest subsidy under Credit Linked Subsidy Scheme (CLSS) for the home loan you avail under PMAY to fund the construction or purchase of your property. As per CLSS,

  • You can avail credit-linked subsidy of 6.5%,s if your loan amount is up to Rs. 6 lakh.
  • You can avail credit-linked subsidy of 4%, on a loan amount of up to Rs. 9 lakh (if you are an MIG-I applicant).
  • You can avail credit-linked subsidy of 3%, on a loan amount of up to Rs. 12 lakh (if you are an MIG-II applicant).

If your sanction exceeds this amount, you can avail the balance at a non-subsidised rate. Besides, all loans under this scheme carry a fixed tenor of a maximum of 20 years.

Choose a Lender who is Listed with PMAY

You can avail a loan from any primary lending institution (PLI) such as a bank or an NBFC. But, before applying you must ensure that your lender is PMAY-approved. This way, you can also enjoy PMAY benefits, as well as additional Home Loan benefits. These include flexible repayment terms, easy online account management and a top-up loan when you choose a lender such as Bajaj Finserv.

So, become a homeowner without saving up the money first or delaying your purchase decision. Make use of the PMAY-U scheme and set your home ownership plans into action.

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