Pradhan Mantri Awas Yojana Urban 2.0

The Pradhan Mantri Awas Yojana - Urban (PMAY-U) was first launched on 25 June 2015 by Prime Minister Narendra Modi to help poor and middle-income families living in urban areas own a home. The scheme provides financial support from the central government to make this dream a reality.

Following the success of the first phase, PMAY Urban 2.0 was announced in the 2024 Union Budget. This second phase aims to assist one crore urban families over the next five years with financial help to either buy, build, or improve their homes. The scheme continues to prioritise affordable housing and includes provisions that ensure inclusive access to housing for all eligible families in cities and towns.

Verticals of PMAY-U 2.0 Scheme

To meet the varied housing needs of urban citizens, PMAY Urban 2.0 has been structured into four key verticals:

1. Interest Subsidy Scheme (ISS)
This scheme reduces the burden of housing loan repayment by offering interest subsidies. It applies to beneficiaries from Economically Weaker Sections (EWS), Low-Income Group (LIG), and Middle-Income Group (MIG) categories. The subsidy depends on income level and loan size.

2. Beneficiary-Led Construction (BLC)
BLC supports individuals from the EWS category who wish to build or improve their homes on their own land. The government releases funds in phases, based on the construction progress.

3. Affordable Housing in Partnership (AHP)
This vertical promotes collaboration between government bodies and private builders to construct large-scale affordable housing projects. A minimum of 25% of the houses in every project is set aside for EWS beneficiaries.

4. Affordable Rental Housing (ARH)
ARH focuses on providing low-cost rental homes for urban migrants and workers from lower-income backgrounds. The strategy includes:

• Converting unused, government-funded housing into rental units.

• Developing new rental housing projects to increase availability.

Interest Subsidy Scheme (ISS) under PMAY-U 2.0

Under the Interest Subsidy Scheme (ISS) of PMAY-U 2.0, eligible families can receive a financial subsidy to reduce their housing loan interest.

Loan eligibility
Housing loans of up to Rs. 25 lakh are covered under the scheme, with the overall property value not exceeding Rs. 35 lakh.

Subsidy details
A 4% interest subsidy is applicable on the first Rs. 8 lakh of the loan. The subsidy is paid over five years in equal instalments. The maximum benefit a family can get is Rs. 1.80 lakh, with the Net Present Value (NPV) coming to Rs. 1.50 lakh.

How it works
The subsidy is credited directly into the borrower’s loan account through Primary Lending Institutions (PLIs), thereby reducing the total outstanding loan. This lowers the monthly instalment burden, making the loan more manageable for families with limited income.

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Who is eligible for PMAY-Urban 2.0?

PMAY-U 2.0 is designed for urban families from the EWS, LIG, and MIG categories who meet specific income and housing conditions.

Apart from financial criteria, priority is also given to widows, senior citizens, single women, transgender persons, people with disabilities, and those from SC, ST, and minority communities. Families who’ve benefited from earlier housing schemes in the past 20 years are not eligible.

While PMAY-U 2.0 provides excellent subsidies, you might need additional financing beyond the Rs. 25 lakh limit to purchase your ideal home. Bajaj Finserv offers home loans up to Rs. 15 Crore* with flexible repayment options and quick approval in just 48 hours*. Check your loan eligibility today to see how much you can borrow for your dream property. You may already be eligible, find out by entering your mobile number and OTP.

How to apply for PMAY-U 2.0 under ISS?

Follow these simple steps to apply for PMAY-U 2.0 under the Interest Subsidy Scheme (ISS):

• Step 1: Visit the official PMAY-U website: pmay-urban.gov.in and click on ‘Apply for PMAY-U 2.0’.

• Step 2: Read all the instructions carefully before starting your application. Keep your Aadhaar and income details ready.

• Step 3: Enter your annual income and select the scheme that suits your needs (ISS, BLC, or AHP). The system will check your eligibility.

• Step 4: Once eligibility is confirmed, give consent for Aadhaar verification and continue the application process by providing required details and uploading documents.

List of documents required for PMAY-U 2.0

Applicants must provide the following documents while applying for PMAY Urban 2.0:

• Aadhaar card details of the applicant – Name, number, and date of birth

• Aadhaar card details of family members – Name, number, and date of birth

• Bank account details – Account number, branch, IFSC code (must be Aadhaar-linked)

• Proof of income – Only PDF format (up to 100 KB)

• Land ownership proof – Required only under BLC vertical (PDF format up to 1 MB)

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