Key Requirements to Avail Home Loan Subsidy

The PMAY initiative by the government of India has helped several home buyers get subsidy on their home loans. Read on to know about the key requirements to get the grant.

The Pradhan Mantri Awas Yojana, which was introduced in June 2015, is an ambitious affordable housing scheme that aims to provide housing for all by March 2022. Apart from building new homes, under the CLSS (credit-linked subsidy scheme), the government seeks to provide financial support in the form of interest subsidy on the home loan to eligible beneficiaries.

To make it easier for the government to grant maximum benefits, the potential beneficiaries are divided into three groups based on their income – EWS (Economically Weaker Section), LIG (Lower Income Group), and MIG (Middle Income Group). You can apply for the PMAY subsidy under any of the above groups.

Eligibility for EWS

  • The total annual income of the house must not be more than Rs. 3 lakhs
  • The carpet area of the property you wish to buy must be up to 30 square metres
  • You are eligible to get a subsidy of 6.5%
  • The maximum duration of the loan for availing the subsidy benefits is 20 years

Eligibility for LIG

  • The yearly household income should be between Rs. 3 lakhs to Rs. 6 lakhs
  • While there is no maximum limit on the home loan amount you can avail, the interest subsidy is available up to Rs. 6 lakhs
  • You can get interest subsidy of 6.50%
  • The carpet area of the house must be up to 60 square metres.
  • The subsidy on interest repayment is applicable for a maximum of 20 years.

Note – eligible beneficiaries under the EWS and the LIG category can avail a maximum home loan subsidy up to Rs 2.67 lakhs

Eligibility for MIG – I

  • The total household income must range from Rs. 6 lakhs to Rs. 12 lakhs
  • The interest subsidy is available on home loans up to Rs. 9 lakhs.
  • The rate of interest subsidy is 4%
  • The carpet area of the house must be up to 120 square metres.

Eligibility for MIG – II

  • The annual household income must be from Rs. 12 lakhs to Rs. 18 lakhs
  • You can avail the subsidy on a home loan up to Rs. 12 lakhs.
  • The carpet area of the house must be up to Rs. 150 square metres.
  • The rate of interest subsidy is 3%

Note – eligible beneficiaries from both MIG – I and MIG – II categories can avail of a maximum home loan subsidy up to Rs. 2.35 lakhs.

Apart from the annual income and property area, you must meet the following requirements to avail the PMAY subsidy benefits:

  • If you apply for the PMAY benefit under EWS and LIG category, the home be mandatorily registered under the name of a female family member, either as a co-owner or full owner, irrespective of whether they contribute towards home loan repayment. This is to ensure the financial security of women.
  • You or any of your family members should not own a home in any part of India.
  • You or your family members should not have received any monetary support under any other state or central government housing scheme. If you are a married applicant, you can either apply for a home loan jointly with your spouse or individually, but together you will be applicable for a single subsidy.

The subsidy available on the home loan interest rate is applicable on a home construction loan, and home renovation loan.

Now that you are aware of the PMAY requirements make sure to apply for the PMAY under the right income category to get maximum benefits. Also, read the loan documents carefully and be aware of the terms and conditions before signing it.

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