The PMAY or Pradhan Mantra Awas Yojana is a special scheme that is aimed to help promote homeownership among the citizens of the country. Specially curated for first-time homebuyers, the scheme enables beneficiaries to enjoy subsidy on a home purchase. PMAY was initiated in 2015 and has progressively helped a large number of homebuyers attain their dream through affordable housing. PMAY-U or Urban is a component listed under the scheme and helps individuals belonging to the urban economy enjoy dignified living. While the beneficiaries have already been provided with assistance through the scheme, they requested for amendments. Read on to understand the details of the same.
The beneficiaries under the given component of the PMAY-U scheme requested enhancement against the current scheme. They wished for assistance to be able to complete their home building targets within the stipulated period as also targeted under the mission. After evaluating and recognizing the financial difficulties faced by the beneficiaries in paying up against the loan, the government decided to offer an interest subsidy to all the beneficiaries who are eligible under the scheme.
Benefit Provided under the Updated Provision:
As part of the newly introduced provision offered by the government, the beneficiaries can enjoy an interest-free home loan of ₹ 3.66 lakh to serve the construction expenses of their dwelling units. This interest-free provision includes the financial assistance of ₹ 1.66 lakh that was already being provided under PMAY-U. So the addition of ₹ 2 lakhs interest-free amount has further made the journey of acquiring a home simpler for beneficiaries.
Why the Special Provision?
The beneficiaries that fall under the Beneficiary Led Component of the PMAY-U come from a section of society that is economically weak. This makes it extremely difficult for them to mobilise their contribution and fulfil their loan repayment. Additionally, they also have to contribute a comparatively higher share than the other States/UT. This makes it further difficult for the beneficiaries to handle the financial obligation. The construction of dwelling units targeted under this section of PMAY-U failed to meet the desired targets.
The tenure offered on the loan under this scheme is 10 years. This loan also includes a mortarium of six months. A beneficiary can repay the loan amount in monthly instalments of ₹ 2,500. This amount and loan tenure essentially aids beneficiaries to make their payment with ease.
How Many will Benefit?
As of March 2021, a total of 41,992 beneficiaries will benefit under the component of the PMAY-U scheme. The special decision is part of the government’s aim to ensure affordable housing facilities among people who belong to the economically weaker section of the society. It aims to facilitate and relive the vision of the government to provide ‘Housing for All’ by the year 2022.
Types of Options to Choose under PMAY-U:
Under the PMAY-U scheme, you can opt from the given options that include:
“In-situ” Slum Redevelopment (ISSR): As part of ISSR, the centre provides slum dwellers with a sum of ₹ 1 lakhs as assistance. The land provided is one in partnership with private developers for rehabilitation in a given State or Union Territory.
Credit Linked Subsidy Scheme (CLSS): This component enables a beneficiary to avail a subsidy of up to ₹ 2.67 lakh under the Economically Weaker Section and Low Income Group. It also allows a subsidy of ₹ 6 lakh under the Mid Income Group 1 and ₹ 9 lakh under the Mid Income Group 2 for home construction and purchase. Economically Weaker Section, Middle Income Group 1 and Middle Income Group 2, an interest subsidy of 6.5%, 4% and 3% can be availed respectively.
Affordable Housing in Partnership (AHP): AHP offers the assistance of ₹ 1.5 lakh per EWS in partnership with home constructors. However, 35% of the houses must be built for the EWS category. The project must also have a minimum of 250 homes serving the category.
Beneficiary-led Individual House Construction/Enhancements (BLC): This component is aimed to serve people who fall under the EWS category of people who are not able to avail benefits in the above-mentioned components. The assistance of ₹ 1.5 is provided by the Central Government to help construct or upgrade a pucca or semi-pucca house. However, the house must measure anywhere between 21 sq mts. To 30 sq. meters.
Eligibility under the PMAY-U
Certain criteria are set down by the Ministry of Housing and Urban Poverty and you must meet the same when applying for the scheme:
- You cannot be owning a home in any state or part of the country
- You can avail of a single subsidy when you apply as a joint owner with a family member or your spouse.
- You have not availed of any other housing subsidy in the past. There must be no history of the benefit attached with your name.
Visit Finserv MARKETS to stay updated on all the amendments made against PMAY.
