Understanding PMAY-Urban Initiative

The government of India, over the years, has implemented many housing schemes to cater to the diverse population. The primary objective of these schemes is to make sure everyone has a roof over their head and a home they can call their own. The parameters and criteria got drafted, taking into account the economic status of every household. In this regard, the Pradhan Mantri Awas Yojana or PMAY housing scheme came into being in 2015.

What is Pradhan Mantri Awas Yojana-U?

Let’s understand what PMAY is, in the first place. Pradhan Mantri Awas Yojana (PMAY) is a social welfare initiative by the Government of India aimed at providing affordable housing to the urban poor. The mission plans to achieve a target of building 20 million affordable houses by 31st March 2022, which also happens to be India’s 75th year of Independence. The initiative consists of 2 parts – PMAY-Urban for the urban poor and PMAY-Gramin for the rural poor. PMAY (U), therefore, addresses urban housing shortage among the Economically Weaker Section (EWS), Low Income Group (LIG), and Middle Income Group (MIG) categories, including the slum dwellers, by ensuring a well-built house to all the eligible urban families by 2022. PMAY (U) adopts a demand-driven approach wherein the housing shortage gets decided on the demand assessment by the states and union territories. The State Level Nodal Agencies (SLNAs), Urban Local Bodies (ULBs)/ Implementing Agencies (IAs), Central Nodal Agencies (CNAs), and Primary Lending Institutions (PLIs) are the main stakeholders. They play a vital role in the implementation and success of this scheme. Under current circumstances, the PM Awas Yojana 2020 has extended the interest subsidy on home loan amounts up to Rs. 12 Lakh. Today, the Pradhan Mantri Awas Yojana - Urban has successfully sanctioned around 1.03 Crore houses. Additionally, the Credit Linked Subsidy Scheme (CLSS) for Middle Income Groups (MIG) recently extended its deadline for application till 31st March 2021.

What is the Affordable Housing Scheme under PMAY?

Indian cities are full of unsold properties that range from Rs. 50 Lakh and upwards. On the other hand, the demand for affordable housing units is much higher than its supply, which unfortunately is worrisome for the less affluent who are looking to purchase a home in urban areas. The introduction of PMAY home loans up to Rs. 12 Lakh, offered on an interest subsidy, can help accommodate the less privileged and other economically weaker sections of society. Some of the key PMAY benefits include:

• Interest subsidies on home loans under Credit Linked Subsidy Scheme (CLSS): This benefit not only makes home buying much more affordable than before, but also ensures equal housing opportunities for all.
• Housing for slum dwellers under In-Situ Rehabilitation Scheme: This includes centrally-provided assistance for redevelopment of slums on private or government-owned lands.
• Home-building assistance under the Beneficiary-Led Construction (BLC) Scheme: Through this benefit, individual families under the EWS categories get financial assistance for either constructing a new home, or making enhancements to their existing house.
• Financial assistance for homes developed under Affordable Housing in Partnership (AHP): Another initiative for the welfare of people under the EWS category, AHP provides financial assistance to affordable housing projects developed by state or union territory governments. These projects can be developed in partnership with government-owned agencies or private developers as well.
• Other noteworthy benefits: PMAY-U includes a mandatory clause for female co-ownership of homes purchased under the EWS or LIG category. There are provisions for widows, disabled individuals, transgender people, senior citizens, and other minorities as well. Another socially responsible feature includes the mandate for using eco-friendly construction technology while developing homes under PMAY-U.

CLSS Categories and Calculations

Particulars	EWS	LIG	MIG I - PMAY (U)	Joint MIG II - PMAY (U)
Household annual Income (Per Annum)	₹ 3 Lakh	₹ 3 to 6 Lakh	₹ 6-12 Lakh	₹ 12-18 Lakh
Eligible Loan Amount for availing interest subsidy	₹ 6 Lakh	₹ 6 Lakh	₹ 9 Lakh	₹ 12 Lakh
Interest Subsidy offered by government	6.5%	6.5%	4%	3%
Maximum loan tenure	20 years	20 years	20 years	20 years
Upfront amount for subsidy	₹ 2.67 Lakh	₹ 2.67 Lakh	₹ 2.35 Lakh	₹ 2.30 Lakh
Maximum Carpet Area	30 sq. m.	60 sq. m.	160 sq. m.	200 sq. m.

Note: 1 sq. m. = 10.7639 sq. ft.

Eligibility

Under the eligibility rule, the beneficiary family should not own a Pucca house (a permanent and solid household), and the beneficiary family should not have availed of central assistance under any housing scheme from the Government of India. The beneficiary family consists of husband, wife, unmarried sons, or unmarried daughters. To avoid duplicity, the beneficiary family members have to provide their Aadhaar Numbers while applying for the loan. Affordable housing has gained momentum in the past few years, with more real estate developers adding properties to this segment. However, availing of the benefits of the PMAY scheme needs careful assessment and evaluation, especially if you are a first-time homebuyer. Therefore, Mahindra Lifespaces suggests you understand the PMAY scheme in detail before applying for it, so you don’t miss out on any of these benefits that come along with it.