What is PMAY?

There is a huge shortage of affordable housing in India, the urban housing shortage was pegged to reach 34.1 million units by 2022. Almost entire urban housing shortage (i.e. 96%) corresponds to Lower Income Group (LIG) and Economically Weaker Sections (EWS). Given the above backdrop, in 2015, the Government launched a comprehensive mission titled “Housing for all by 2022” i.e. by India’s 75th year of Independence. Under the Housing for all mission, Government has introduced Pradhan Mantri Awas Yojna (PMAY).

How much loan amount is sanctioned to the borrower under PMAY?

The borrower is classified into four categories based on the income group –

Category	Annual household income
Economically Weaker Section (EWS)	Upto Rs. Three lakhs p.a.
Low Income Group (LIG)	Rs. 3.01 lakhs – Rs. 6 lakhs
Middle Income Group 1 (MIG1)	Rs. 6.01 – Rs. 12 lakhs
Middle Income Group 2 (MIG2)	Rs. 12.01 lakhs – Rs. 18 lakhs

Based on which of the above income categories one falls, the maximum loan amount and subsidy to be granted is fixed. See the table below:

Category	Max Loan Amount	Max subsidy amount
EWS	Rs. 6 lakhs	Rs. 2.67 lakhs
LIG	Rs. 6 lakhs	Rs. 2.67 lakhs
MIG 1	Rs. 9 lakhs	Rs. 2.35 lakhs
MIG 2	Rs. 12 lakhs	Rs. 2.30 lakhs

Eligibility criteria for taking a loan under PMAY?

It should be the first home of the buyer and there should not be any other residential property registered in the name of the borrower and his family. The house bought under PMAY should be registered jointly in the name of husband and wife or in the name of wife only. In case of single men, they can buy a house by registering the property jointly by making their mother a co-applicant. Single men can apply under PMAY if there is no woman living in the family but unmarried women cannot apply for a loan under PMAY. However, widows and divorcees can apply under this scheme.

The annual household income should not exceed Rs.18 lakhs

The carpet area of the house to be brought under the scheme should not be more than 60 square meters.

A family can buy only one home under PMAY

There is no age limit to apply for a loan under PMAY

Will I get the subsidy directly from the government?

No! The subsidy is passed on by the government to the housing finance company through National Housing Bank. The housing finance company in turn passes it on to the borrower resulting in reduction of the amount of home loan.

How much time does it take to receive the subsidy?

The housing finance company normally receives the subsidy within three months after the application is approved.

Social impact: Tangible and intangible benefits of availing a loan under PMAY

The tangible benefits can be divided into two parts during a) Construction and b) Occupancy Construction: In this phase, a lot of employment and business is generated that boosts the local economy. A lot of ancillary businesses are impacted positively resulting in their growth as well. For example, the businesses involved in supplying raw material for construction and those in transport business are impacted positively during this phase.

Occupancy: It’s becomes an asset of the buyer. Besides, it also provides numerous health benefits that come along with a home because of hygienic sanitation facilities and guard against dirt, dust and water.

Intangible benefits: It provides social security and societal integration for the buyer of the house. It upgrades the standard of living of the beneficiary and also instils a sense of achievement and improves self perception.