PMAY – Pradhan Mantri Awas Yojana

Owing a home is dream that everyone sees. As soon as a person is settled in life, they start planning & saving for their dream home.

The algorithm goes like deciding on the budget for your home, arranging a down payment and associated costs, have enough money in your savings account to cover any unforeseen expenses associated with buying a home, & finally finding a home that you would like to buy.

To help the people of the country turn this dream into a reality, Prime Minister Narendra Modi launched Pradhan Mantri Awas Yojana (PMAY) in June 2015 with an aim to provide affordable housing to all by the year 2022. The PMAY mission has four verticals:
  1. Slum Rehabilitation,
  2. Credit Linked Subsidy Scheme,
  3. Affordable housing in partner with private & public sectors, and
  4. Subsidy for beneficiary-led individual house construction
Credit Linked Subsidy Scheme Of the above all, Credit Linked Subsidy Scheme (CLSS) is a major division of PMAY and the subsidy scheme is applicable for Lower Income Group/Economically Weaker Section (LIG/EWS) and Middle Income Group (MIG – I & II). The task of implementing this scheme has been given to Housing & Urban Development Corporation (HUDCO) & National Housing Bank (NHB). In order to help more economically weaker people to build a house, the Ministry of Housing and Urban Poverty Alleviation has enlisted the help of banks to provide loans for construction under PMAY. These banks offer loans at a comparatively lower rate and the government pays the rest of the amount on behalf of the applicant.
S. No. Particular CLSS Existing scheme CLSS - MIG I CLSS - MIG II
1 Scheme Name CLSS - EWS/LIG CLSSS - MIG I CLSS - MIG II
2 Household Income (P.A. Rs) Upto 6 Lakhs Above 6 Lakhs to 12 Lakhs Above 12 Lakhs to 18 Lakhs
3 Dwelling Unit Carpet Area Upto 60 Sqmtr but can build a bigger house Upto 120 Sqm Upto 150 Sqm
4 Female Ownership Mandatory Not mandatory but advisable Not mandatory but advisable
5 Eligible Housing Loan for Subsidy (Rs.) 6 Lacs (Above 6 Lacs normal ROI) 9 Lacs (Above 9 Lacs normal ROI) 12 Lacs (Above 12 Lacs normal ROI)
6 Maximum Subsidy 2,67,280 2,35,068 2,30,156
7 Tenor for calculating subsidy amount 20 Years 20 Years 20 Years
8 House Hold definition Husband, Wife and Unmarried Children An adult earning member (irrespective of its marital status be considered as seperate household) Husband, Wife and Unmarried Children An adult earning member (irrespective of its marital status be considered as seperate household) Husband, Wife and Unmarried Children An adult earning member (irrespective of its marital status be considered as seperate household)
9 Documentation requirement Aadhar of Applicant, co-applicant, adult household members is Must Aadhar of Applicant, co-applicant, adult household members is Must Aadhar of Applicant, co-applicant, adult household members is Must
10 Loan for house upgradation Covered Not Covered Not Covered
11 Implementation date and validity 17.06.2015 Valid till 2022 01.01.2017 Valid till March 2019 01.01.2017 Valid till March 2019
Disclaimer: Interest subsidy on housing loan is calculated at applicable rates for PMAY EWG/LIG/MIG I/MIG II schemes respectively for a tenure of 20 years or the tenure of loan, whichever is lower. GOI will retain the supreme right of granting/rejecting the subsidy and Bank will not be held liable for the decisions taken by GOI. Recent Changes Made Under The PMAY Recently, the government has slashed the GST from 12% to 8% on the home loans through this scheme. Any person buying a home for the first time will have to pay an 8% GST, provided he/she takes a home loan through the CLSS under the PMAY. CLSS for EWS/LIG EWS Households having income of upto  3 lakhs per annum and LIG households having an annual income of upto  6 lakhs are eligible under this scheme.
Example Loan Amount Loan Amount Eligible for Subsidy Interest Subsidy Balance Loan Initial EMI @10% Reduced EMI after crediting the subsidy Monthly Savings Annual Savings
1 3,00,000 3,00,000 1,33,640 1,66,360 2,895 1,605 1,290 15,480
2 6,00,000 6,00,000 2,67,280 3,32,720 5,790 3,211 2,579 30,948
3 10,00,000 6,00,000 2,67,280 7,32,720 9,650 7,071 2,579 30,948
*Above figures are indicative and may vary from case to case basis. Source: Ministry of Urban Development. Salient Features
  1. The maximum interest subsidy is upto Rs 2, 67,280
  2. The beneficiaries seeking housing loan under the scheme are eligible for an interest subsidy at the rate of 6.5% for 20 years or tenure, whichever is lower.
  3. The Credit Linked Subsidy will be available for amount upto 6 lakhs and anything beyond that will be calculated at normal market interest rate.
  4. Aadhaar Card is must
  CLSS for MIG (I & II) Applicants with annual household income between  6-12 lakhs in urban areas fall into the MIG I category and 12-18 lakhs fall under MIG II category. MIG I
Example Loan Amount Loan Amount Eligible for Subsidy Interest Subsidy Balance Loan Initial EMI @10% Reduced EMI after crediting the subsidy Monthly Savings Annual Savings
1 6,00,000 6,00,000 1,56,712 4,43,288 5,790 4,278 1,512 18,144
2 9,00,000 9,00,000 2,35,068 6,64,932 8,685 6,417 2,268 27,216
3 12,00,000 9,00,000 2,35,068 9,64,932 11,580 9,312 2,268 27,216
MIG II
Example Loan Amount Loan Amount Eligible for Subsidy Interest Subsidy Balance Loan Initial EMI @10% Reduced EMI after crediting the subsidy Monthly Savings Annual Savings
1 9,00,000 9,00,000 1,72,617 7,27,383 8,685 7,019 1,666 19,992
2 12,00,000 12,00,000 2,30,156 9,69,844 11,580 9,359 2,221 26,652
3 15,00,000 12,00,000 2,30,156 12,69,844 14,475 12,254 2,221 26,652
Source: Ministry of Urban Development. Above figures are indicative and may vary from case to case basis. Source: Ministry of Urban Development. Salient Features
  1. The maximum interest subsidy is upto Rs. 2.35 lakh for MIG I & Rs. 2.30 lakh for MIG II
  2. For MIG I category, there is an interest subsidy @4% for amount upto Rs. 9 lakhs for 20 years tenure or home loan tenure, whichever is lower.
  3. For MIG II category, there is an interest subsidy @3% on home loans for amount upto 12 lakhs for 20 years tenure or home loan tenure, whichever is lower.
  4. With the credit of interest subsidy on the beneficiary’s loan account, effective housing loan and EMI reduced there off.
  5. Aadhaar Card is must.
 
EWS/LIG The eligibility criteria for both EWS/LIG and MIG group is mentioned below – EWS/LIG –
  1. An applicant/family/household should not own a pucca house in any part of the country either in his name or in the name of his any family member. (The beneficiary family consists of husband, wife and unmarried children)
  2. The beneficiary family must not have availed any assistance (central/state assistance) under any housing scheme from the GOI.
  3. In the property ownership, one adult female membership is required
  4. The location of the property should fall under all statutory towns as per 2011 census and their adjacent planning area (updated by the government from time to time)
EWS/LIG
Particular CLSS – EWS/LIG
Household Income Upto 6,000,00
Upgradation of House Covered
Subsidy Amount Calculation Tenor 20 years (earlier it was 15 years)
Required Documents Aadhaar of the applicant & co-applicant
MIG
  1. A beneficiary/family/household should not own a pucca house in any part of the country either in his name or in the name of his any family member. (A beneficiary family comprises husband, wife, unmarried sons and/or unmarried daughters. An adult earning member, irrespective of marital status, can be treated as a separate household.)
  2. The beneficiary family must not have availed benefits/assistance ever under any housing scheme from GOI
  3. In the property ownership, one adult female membership is desirable
  4. The property should fall under the area of statutory towns as per 2011 census and or adjacent planning area (updated by government time to time)
Particular CLSS – MIG I CLSS – MIG II
Annual household income 6,00,001 - 12,00,000 12,00,001 - 18,00,000
Dwelling Unit Carpet Area Upto 90 Sq.mt Upto 110 Sq mt
NOC requirement Not required Not required
Tenor for subsidy amount calculation 20 years 20 years
Mandatory Document Aadhaar of an applicant, co-applicant is required Aadhaar of an applicant, co-applicant is required
House Upgradation Not required Not required
 
Subject to eligibility, both whether you are salaried or self-employed, you can avail the benefits on your home loan under PMAY housing for all. Salaried GroupApplication Form Identity Proof: PAN Card any of the below documents -
  1. Driving License
  2. Voter Card
  3. Photo Credit Card
  4. Aadhar Card
  5. Valid Passport
  6. Body issued photo identity card
  7. Letter from recognized public authority or public servant verifying the identity of the customer with photograph (not more than 1 months old)
Address Proof
  1. Latest Utility bill
  2. Aadhar Card
  3. Voter Card
  4. Rent agreement on stamp Paper
  5. Valid Passport
  6. Life Insurance Policy
  7. Letter from a recognized public authority or public servant verifying the identity and residence of the customer
  8. Bank Statements reflecting address of borrowers of any commercial nationalized bank
  9. Latest card card statement
  10. Residence address Certificate /letter by employer on company letterhead
  11. If owned, copy of Sale Deed of the property (residence),
  12. Municipal or property tax receipt
  13. Account statement of Post Office Savings Account
  14. Letter of allotment of accommodation from employer issued by State or Central Govt. departments, statutory or regulatory bodies, and public sector undertakings, scheduled commercial banks, financial institutions, and listed companies. Similarly, leave and license agreements with such employers allotting official accommodation
  15. Pension or family pension payment orders (PPOs) issued to retired employees by Govt. departments or Public Sector Undertakings, if they contain the address
  16. Documents issued by Govt. departments of foreign jurisdiction and letter issued by Foreign Embassy or Mission in India
Income Proof
  1. Salary slips of last 2 months
  2. Salaried account bank statement for last 6 months
  3. Income Tax Return/latest form 16
  Other Required Documents – Running loan documents with repayment bank statement for 6 months Property Documents
  1. Copy of complete chain documents of the property (as applicable)
  2. Agreement to Sell copy (if executed)
  3. Allotment Letter / Buyer Agreement copy (if applicable)
  4. Copy of Receipt/(s) of payment/(s) made to the developer (if applicable)
Self Employed Group – Application Form Identity Proof: PAN Card and any of the below documents –
  1. Driving License
  2. Voter Card
  3. Photo Credit Card
  4. Aadhar Card
  5. Valid Passport
  6. Body issued photo identity card/ Letter from recognized public authority or public servant verifying the identity of the customer with photograph (not more than 1 months old)
Address Proof Any one of the below documents –
  1. Voter Card
  2. Aadhar Card
  3. Valid Passport
  4. Letter from a recognized public authority or public servant verifying the identity and residence of the customer
  5. Latest Utility bill
  6. Rent agreement on stamp Paper
  7. Bank Statements reflecting address of borrowers of any commercial nationalized bank
  8. Credit Card Statement not older than 3 months
  9. Life Insurance Policy
  10. Residence address Certificate /letter by employer on company letterhead
  11. Copy of Sale Deed of the property (residence), if owned
  12. Municipal or property tax receipt
  13. Post office saving bank account statement
  14. Pension or family pension payment orders (PPOs) issued to retired employees by Govt. departments or Public Sector Undertakings, if they contain the address
  15. Letter of allotment of accommodation from employer issued by State or Central Govt. departments, statutory or regulatory bodies, and public sector undertakings, scheduled commercial banks, financial institutions, and listed companies. Similarly, leave and license agreements with such employers allotting official accommodation
  16. Documents issued by Govt. departments of foreign jurisdiction and letter issued by Foreign Embassy or Mission in India
  Proof of Income All the documents given below –
  1. Running loan statements along with 6 months repayment bank statement
  2. Share holding pattern latest list (duly CA/CS certified)
  3. Memorandum of Understanding for private limited companies
  4. Partnership deed for partnership firms
All of the Property Documents
  1. Copy of complete chain documents of the property (as applicable)
  2. Agreement to sell copy
  3. Allotment Letter/Buyer Agreement (if applicable)
  4. Payment receipt copy (if applicable)

Despite having made massive leaps in development over the last decade or so, India still has a large number of people living in abject poverty, most of whom don’t have a house to call their own. The Indian government took up a serious step towards abolishing homelessness with the introduction of Pradhan Mantri Awas Yojana. This project, which was previously known as Housing For All, will provide a roof to over 20 million urban poor people by the year 2022. In order to do so, the Ministry of Housing and Urban Poverty Alleviation has set a route map and has also made clear the eligibility criteria a prospective applicant need to meet.
Credit linked subsidy scheme under the Pradhan Mantri Awaas Yojana (Urban) provides interest subsidy on housing loans to eligible beneficiaries belonging to the EWS/LIG & MIG segment. The Ministry of Housing and Urban Poverty Alleviation has enlisted the help of banks in the country to provide loans for construction under PMAY. The banks offer loans at a comparatively lower rate as government pays the rest on behalf of the applicant. This model of subsidized loans help more economically weaker people to build a house Under this, there is a Credit Linked Subsidy Scheme on home loans for properties in urban market belonging to Economically Weaker Section (EWS), Low Income Group (LIG) and Middle Income Group 1 & 2 (MIG). It can be availed for new or resale purchase of home, construction, or for extension or improvement of rooms, kitchen, toilet etc.
CRITERIA EWS/LIG MIG-I MIG-II
Maximum Household income per annum Rs.3 lakhs/Rs.6 Lakhs Rs.6 - Rs.12 Lakhs Rs.12-18 Lakhs
Maximum Property Area ( carpet area) No limit** 120 sq.m 150 sq.m
Maximum Loan amount for subsidy calculation Rs.6 lakhs Rs.9 lakhs Rs.12 lakhs
Maximum tenure for subsidy calculation 20 years
Interest Subsidy (% p.a.) 6.50% 4% 3%
Subsidy amount Rs.2.67 lakhs Rs.2.35lakhs Rs.2.30 lakhs
Women ownership on property Yes Not applicable Not applicable
The beneficiary family should not own a pucca house in India Applicable Applicable Applicable
Aadhar Card Mandatory Mandatory Mandatory
** Home extension /Repair is included only under EWS-LIG scheme, the area limit will be 30sq.m./323sq.ft and 60sq.m./646sq.ft of built up area for EWS and LIG category respectively

Disclaimer: Interest subsidy on housing loan is calculated at applicable rates for PMAY EWG/LIG/MIG I/MIG II schemes respectively for a tenure of 20 years or the tenure of loan, whichever is lower. GOI will retain the supreme right of granting/rejecting the subsidy and Bank will not be held liable for the decisions taken by GOI.

A beneficiary family not owning a house in any part of India is eligible for this subsidy subject to income criteria as defined for the family.
The beneficiary family will comprise husband, wife and unmarried children. (An adult earning member irrespective of marital status can be treated as a separate household)
Woman ownership or co-ownership is mandatory for EWS and LIG. However, this condition is not mandatory for self-construction/extension or MIG categories.
After the loan is disbursed, the required details are sent by Bank to NHB for validation of data and other checks. NHB after necessary due diligence approve the subsidy to eligible borrowers.
  • After the loan is disbursed, Bank will claim subsidy for eligible borrowers from National Housing Bank (NHB).
  • NHB after due diligence would approve & credit the subsidy amount to Bank for all eligible borrowers.
  • The subsidy will be calculated on the NPV (Net Present Value) method at a discount rate of 9%.
  • On receipt of subsidy amount from NHB, same is credited to respective home loan account of the borrower and EMI is reduced proportionately.
In such cases, the subsidy is to be recovered and refunded to the Central Government.
Yes, beneficiary can avail a longer term beyond 20 years as per Bank credit norms but the subsidy will be restricted to a max term of 20 years.
No, but the subsidy will be limited to the loan amount defined against each category and additional amount will be at non- subsidized rate of interest.
In case a borrower who has taken a housing loan and availed of interest subsidy under this scheme but later on switches to another lending institution for balance transfer, such beneficiary will not be eligible to claim the benefit of this scheme again.
No, there are no additional documents except a self declaration of not owning a pucca house in the format as available in Bank offices.
GST on Affordable Homes Slashed to 8% The Pradhan Mantri Awas Yojana has already helped thousands of people in India fulfil their dreams of owning a house. To make things even better for the prospective homebuyers who are looking to avail a home loan through this scheme, the government has slashed the GST from 12% to 8%. Any person who is buying a home for the first time will have to pay an 8% GST, provided he/she takes a home loan through the Credit Linked Subsidy Scheme (CLSS) under the PMAY. There are certain eligibility criteria to be fulfilled in order to successfully avail a home loan through the CLSS. For instance, the applicant’s family income should not be above Rs.18 lakh per annum and the maximum carpet area (area enclosed within the walls) eligible for the subsidy is 150 sqm. The tax benefit will be available for the low-cost housing projects as well. Anyone who does not meet the aforementioned requirements will have to pay 12% GST.
For loan amount of Rs.3 lakh:
Amount of loan Rs.3 lakh
Loan amount eligible for the subsidy Rs.3 lakh
Balance loan Rs.1,66,360.00
Interest subsidy Rs.1,33,640.00
Initial EMI Rs.2,895
Reduced EMI after subsidy credit Rs.1,605
Savings on a monthly basis Rs.1,290
Savings on an annual basis Rs.15,480
For loan amount of Rs.6 lakh:
Amount of loan Rs.6 lakh
Loan amount eligible for the subsidy Rs.6 lakh
Balance loan Rs.3,32,720.00
Interest subsidy Rs.2,67,280.00
Initial EMI Rs.5,790
Reduced EMI after subsidy credit Rs.3,211
Savings on a monthly basis Rs.2,579
Savings on an annual basis Rs.30,948
For loan amount of Rs.10 lakh:
Amount of loan Rs.10 lakh
Loan amount eligible for the subsidy Rs.6 lakh
Balance loan Rs.7,32,720.00
Interest subsidy Rs.2,67,280.00
Initial EMI Rs.9,650
Reduced EMI after subsidy credit Rs.7,071
Savings on a monthly basis Rs.2,579
Savings on an annual basis Rs.30,948
Income of the household per year Rs.12 lakh
Maximum tenure of the loan 20 years
Interest subsidy per year 4%
Eligible amount of loan for interest subsidy under CLSS (Credit Linked Subsidy Scheme) for MIG Rs.9 lakh
Maximum interest subsidy Rs.2.35 lakh
Rate of discount for NPV (Net Present Value) calculation of the interest subsidy 9%
Dwelling unit max carpet area 90 sq.mt
Monthly EMI (8.65%) with interest subsidy Rs.5,834
Monthly EMI (8.65%) without interest subsidy Rs.7,894
Income of the household per year Rs.18 lakh
Maximum tenure of the loan 20 years
Interest subsidy per year 3%
Eligible amount of loan for interest subsidy under CLSS (Credit Linked Subsidy Scheme) for MIG Rs.12 lakh
Maximum interest subsidy Rs.2.3 lakh
Rate of discount for NPV (Net Present Value) calculation of the interest subsidy 9%
Dwelling unit max carpet area 110 sq.mt
Monthly EMI (8.65%) with interest subsidy Rs.8,059
Monthly EMI (8.65%) without interest subsidy Rs.10,528

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