Know Everything about the Pradhan Mantri Awas Yojana

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Over the years, the federal governments of India, both the central and the states, have introduced multiple financing schemes to help Indians make affordable property purchases. It is typically directed to real estate purchases for residential ownership, which by way of the average market pricing, remain costly for many.

For instance, to ease the process of finding an affordable shelter, the Government of India introduced the Pradhan Mantri Awas Yojana in 2015. According to stats, it was noticed that after the launch of this scheme, investment from private equity real estate firms in India reached around USD 6.1 billion.

While indicating an increase in investment in real estate, the scheme, abbreviated as PMAY, has also enabled better housing opportunities for many. Here’s a detailed look at the scheme.

Essential aspects the Pradhan Mantri Awas Yojana

The mission of this scheme is to provide affordable housing to all by the year 2022. To that end, an interest subsidy is provided on home loans availed by eligible individuals for home construction, new house property purchase, improvements to an existing one, or even repurchases. The subsidy benefits are, nevertheless, dependent on the income group of an individual, defined under various categories.

Under this scheme, eligible individuals receive a subsidy on the interest rate, helping them save up to 2.67 lakh, while the maximum loan tenure can extend up to 20 years. Depending upon the income group, different interest rates have been allotted, for instance, 6.5% interest subsidy for EWS (Economically Weaker Section), 4% for the Middle-Income Group (MIG I) and 3% for MIG-II.

The launch of this scheme has been beneficial for many since a particular percentage of total interest accrual is covered by the government via subsidy benefits. It can thus be touted as the perfect time to buy your dream home if you have been planning house purchase but putting it off due to unaffordable interest.

Further, four essential features of this scheme include –

Beneficiary-led construction.
Affordable housing.
In-situ slum rehabilitation.
Credit-linked subsidy.

These features have also been beneficial in boosting the country’s real estate sector as more investments under affordable housing have been made after this.

Eligibility criteria for PMAY

The ‘Housing for All’ mission led to multiple implementations by the Government; the Pradhan Mantri Awas Yojana being one on the widest scale. It involved nation-wide efforts from the Government’s end to help individuals from economically marginalised sections fulfil their housing dreams. To avail the benefits, one must thus fulfil the following PMAY eligibility requirements.

There should not be a pucca house owned by the beneficiary family (that includes the husband, wife, and even their children).
When it comes to a married couple living on rent, either one of them or both will be allotted with a single subsidy only on a house purchase.
Individuals should not have derived benefits from any previous government-backed housing scheme under their name.
Individuals must also be first-time homeowners to avail of this benefit.

It is advised to go through the entire process of applying for a home loan before someone applies for benefits under this scheme as the documentation and other requirements can be long-drawn and challenging. One also needs to calculate the monthly outgo to decide if he/she will be able to afford the EMIs payable every month as per the loan amount availed and his/her repayment capacity.

Ways to apply for benefits under the Pradhan Mantri Awas scheme

Once the PMAY eligibility criteria are fulfilled, one can go through the application procedure to get these subsidy benefits. There are different ways to opt for this scheme, such as:

1.You can visit the official site of PMAY to complete the application online.
2.The government has also assigned responsibility to a few common service centres in most of the Indian cities to facilitate such application against a nominal charge of Rs.25.
3.Several housing finance companies also assist eligible individuals regarding the scheme. Proceeding with an application via them can make the process hassle-free.

Buying a house can be tedious since it involves taking care of multiple aspects, right from appointing a broker to finding the right kind of property. It also essentially involves calculating EMIs when financing such purchase through home loans to check if it is affordable for you. Many lenders thus provide customised calculators to help with this calculation and estimation.

Further, top housing finance companies have also introduced pre-approved offers to make this process of financing convenient and less time-consuming. Such offers are available on several financial products, like home loans, loans against property, etc. You can check your pre-approved offer by providing basic information like your name and contact number.

For a commoner, decoding the home loan process in India can be daunting with multiple requirements regarding documents, in-depth legal check, etc.

Nevertheless, NBFCs make such processing easier due to their simplified eligibility and document requirements. With the Pradhan Mantri Awas Yojana and its benefits, it has only become easier to streamline financing as it offers financial stability and affordability. Make sure to check your annual family income alongside other parameters for easy access to benefits under this scheme.

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