Pradhan Mantri Awas Yojana (PMAY) is a scheme launched by our honorable Prime Minister Shri Narendra Modi for the Economically Weaker Section (EWS), Low Income Group (LIG) and Middle Income Group (MIG). The beneficiary would be eligible for interest subsidy on purchase of a house.

What is it

The scheme has been launched with an objective of constructing more than 2 crore houses across the nation within a time period of 7 years. The beneficiary of this scheme would be the poor and people living in the EWS, LIG and MIG categories.

The vision of the government is that of building affordable pucca houses with water facility, sanitation and electric supply round-the-clock. The scheme comprises of four key aspects:

• It aims to transform slum areas by building homes for slum dwellers in collaboration with private developers.
• It plans to give credit-linked subsidy to weaker and mid-income sections on loans taken for new construction or renovation of existing homes.
• The government will chip in with financial assistance for affordable projects done in partnership with states/union territories for the EWS.
• It will extend direct financial assistance of Rs. 1.5 Lakhs to EWS

How does it Work

ELIGIBILITY

• A family comprising of husband, wife and unmarried children.
• Unmarried and earning young adults for acquisition of a new house including repurchase.
• Beneficiary should not own a pucca house (home without a concrete roof) either in their name or in the name of any member of their family in any part of India to receive central assistance under the mission.
• Meeting income criteria defined as follows:
  Income Category- Upto ₹ 6 Lakhs | Upto ₹ 12 Lakhs | Upto ₹ 18 Lakhs

BENEFIT

Income Category	Loan Amount Considered	Interest subsidy (% points)	Reduction in EMI*	Net Saving on Interest
Upto ₹ 6 Lakhs	₹ 6 Lakhs	6.5	₹2,219	₹ 246,625
Upto ₹ 12 Lakhs	₹ 9 Lakhs	4	₹2,158	₹ 239,843
Upto ₹ 18 Lakhs	₹ 12 Lakhs	3	₹2,200	₹ 244,468
*On a 20 year Loan at 9%: ₹ NO Cap On Total Loan

PROCESS

STEP 1	First you book a flat and apply for housing loan.	STEP 5	Your housing finance bank submits the subsidy claim to NHB.
STEP 2	Bank sanctions your plan.	STEP 6	National Housing Bank transfers the amount to your account.
STEP 3	Registration of the account.	STEP 7	Bank deposits the subsidy to loan account of purchaser.
STEP 4	Registration of agreement and disbursal of your loan.	STEP 8	Loan reduces to the extent of the subsidy received & EMI is set.

DOCUMENTATION

There is no additional document except a Declaration of not owning a pucca house, Customers not having income proof would require submitting an Affidavit.

PMAY & You

AIf you are an active home buyer, this scheme combined with a falling interest rate regime could mean improved loan growth for banks and NBFCs focused on this segment. The ongoing pick up in demand for affordable housing has already provided a leg up to the performance of banks and housing finance companies.

Affordable housing is the current flavour of the season thanks to this scheme. Places like Neral, which are a part of the Mumbai Metropolitan Region, have a lot to offer in terms of homes which are not only a part of an integrated township but also come with a plathora of amenities. With excellent connectivity to the established urban areas, social infrastructure and zero pollution zones these locations are on the rise.

Of all the various benefits that this scheme has to offer, the best one is the privilege of owing your own home.