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With the introduction of the Pradhan Mantri Awas Yojana Scheme last year, a lot has been written about it. All real estate players are advertising it. All bankers are offering it. But for a first time home buyer all of it might seem a bit too overwhelming. At Poddar Housing, we consider us, your partner in the home buying process. We’ve tried to explain the whole process as simply as possible. This will give you a clear idea of what is PMAY and how you can go about to apply for the same.
The Pradhan Mantri Awas Yojana (PMAY) is a government scheme to help promote “Housing for all by 2022”. It aims to assist first time home buyers and encourage women to become home owners by providing an interest subsidy on home loans. PMAY brings into fold a Credit Linked Subsidy Scheme (CLSS) for home loans in the urban property market.
The scheme is aimed to provide primary housing for all. The basic eligibility rules, in order to avail PMAY benefits are as follows.
There are 4 broad categories of the CLSS scheme under PMAY. The categories, and the loan eligibility & subsidy across these categories have been explained in the table below**.
| Category | Household Income | Maximum House Area | Govt Subsidy | NPV of subsidy |
|---|---|---|---|---|
| Economically Weaker Section (EWS) | < 3 lacs | 30 sqm | 6.5% for loan up to 6 lacs | 2.67 lacs |
| Lower Income Group (LIG) | 3-6 lacs | 60 sqm | 6.5% for loan up to 6 lacs | 2.67 lacs |
| Medium Income Group 1 (MIG1) | 6-12 lacs | 160 sqm | 4% for loan up to 9 lacs | 2.35 lacs |
| Medium Income Group 2 (MIG2) | 12-18 lacs | 200 sqm | 3% for loan upto 12 lacs | 2.3 lacs |
Rest is simple. Whoever is availing the PMAY subsidy under a particular category, gets the subsidy amount directly deducted from the overall loan amount. This reduces the overall EMI burden. The savings in terms of EMI has been highlighted in the table below.
| Original Loan amount (A) | Original EMI | NPV of subsidy (B) | Revised Loan amount (A-B) | Revised EMI | EMI savings |
|---|---|---|---|---|---|
| 6 | 5398 | 2.67 lacs | 3.33 | 2996 | 2402 |
| 6 | 5398 | 2.67 lacs | 3.33 | 2996 | 2402 |
| 9 | 8098 | 2.35 lacs | 6.65 | 5983 | 2115 |
| 12 | 10797 | 2.3 lacs | 9.7 | 8727 | 2070 |
PMAY linked loans can be availed from any primary lending institutions (PLI) such as scheduled commercial banks, housing finance companies, cooperative banks, etc. Housing Development Corporation (HUDCO) and National Housing Bank (NHB) have been identified as the Central Nodal Agencies (CNAs) to channelize this subsidy to the lending institutions. The process has been highlighted in the flowchart below:
Our projects are approved for funding by various leading banks. Our bankers are available on site to assist you with the PMAY subsidy and your home loan.
Let us help. Speak to our property expert today.