To help the underprivileged buy a home of their own, the government of India launched a scheme to provide subsidies on home loan under the Pradhan Mantri Awas Yojana. Read on to know about how you can avail the subsidy under the programme.
The Pradhan Mantri Awas Yojana is one of the most talked-about initiatives of the government in recent times. The PMAY, which was launched in June 2015, has benefited several first-time home buyers in India. Under the scheme, the government grants a subsidy on the home loan interest rate to help the home buyers make the loan more affordable and accomplish their dream of owning a home. While there are many participating lenders under the PMAY, to avail the subsidy, you must meet specific eligibility requirements, in terms of the income, the carpet area of the property and more.
To avail the benefits of PMAY, you can apply for a home loan either as a representative of your family that includes your spouse, unmarried children and parents or as an unmarried individual. Also, there are specific income criteria that you must meet to get the benefits. Some of these criteria include:
- You or any of your family member cannot own a pucca house. If you are or any of the family members are an existing homeowner, you cannot apply for a home loan underPMAY
- You are any of your family members should not have applied or availed financial benefits under any other government schemes in the past
- You must mandatorily have an Aadhaar card to be eligible for loan benefits under PMAY
- To be eligible for PMAY under the economically weaker section (EWS) category, your annual income must be less than three lakhs
- To be eligible for PMAY benefits under low-income group (LIG) category, your household income must not be more than six lakhs per annum
- To be eligible for subsidy benefits under the middle-income group (MIG I), the combined income of all the household members must not exceed 12 lakhs per annum
- To be eligible for benefits under the middle-income group (MIG II), the annual income of the should be less than 18 lakhs.
How to avail the home loan subsidy under PMAY?
If you meet the eligibility as mentioned above, you can apply for the home loan with any of the participating lenders of your choice. Next, you must compare the loan offers of the different lenders in terms of the interest rate, the processing fee, prepayment charges and other services.
Once you choose the lender, you must submit a loan application form and provide all the necessary documents. This will include identification proof, proof of residence, income documents, and property-related documents. Once the lender approves the application after verifying the documents, the amount will be credited to your bank account. The lender will then claim the subsidy from the government on your behalf.
When the lender gets the subsidy, they will credit the amount into your home loan account, and your EMI will automatically decrease from that month. This means when you apply for a home loan, you must repay the EMIs as per the lender’s usual interest rate until the government approves the PMAY application.
After the PMAY application is sanctioned, not only will the EMI decrease, but you will also get compensation for the excess interest you have already repaid.
What is the maximum amount you can claim under PMAY?
The maximum subsidy you can avail on the home under the Pradhan Mantri Awas Yojana is 2.67 lakh Rupees. The percentage of the grant you can avail will vary based on the income group you fall under.
