What is the Pradhan Mantri Awas Yojana or PMAY?

by Litty Jose Finance Analyst

What is the Pradhan Mantri Awas Yojana or PMAY?

The Pradhan Mantri Awas Yojana was announced by our Prime Minister last year in a bid to make better housing available to more people in the country. PMAY is an interest subsidy scheme that has been named as 'Credit Linked Subsidy Scheme for Middle Income Groups – CLSS (MIG)'. As per this subsidy, middle and lower income groups with incomes in the eligible range will get a subsidy on their interest rate of three to four percent. This scheme has been devised to ensure that more people can avail of home loans and fulfil their dreams of owning a home of their own.

Who is eligible for this home loan subsidy?

Based purely on income there are two groups of people who are eligible for this subsidy on Home Loan Interest Rates. These groups are broadly classified as middle income groups (MIG) and lower income groups (LIG). The CLSS scheme has been designed specifically for the economically weaker sections of society (EWS). However, middle income groups too can avail of this subsidy if they’re income fall in this category.

What are the eligibility criteria for this CLSS scheme?

1. People whose incomes fall in the range of 6 lacs to 18 lacs are eligible for this subsidy under the CLSS.

2. People whose Housing Loans were approved and those whose home loan application was in review since 1^st January 2017 are eligible for this subsidy.

3. Peoples who have an annual income of 12 lacs are eligible for a subsidy of four percent on their home loan of up to 9 lacs. People who have an annual income of 18 lacs are eligible for a subsidy of three percent on a home loan of 12 lacs according to the Prime Ministers’ address on the eve of New Year.

What are the income slabs for the CLSS eligibility under the Pradhan Mantri Awas Yojana?

1. People with an annual income of Rs.6 lacs and below can avail of loan of Rs.6 lacs at an interest of 6.5% for tenure of 20 years.

2. People with an annual income of Rs.12 lacs and below can avail of loan of Rs.9 lacs at an interest of 4% for tenure of 20 years.

3. People with an annual income of Rs.18lacs and below can avail of loan of Rs.12 lacs at an interest of 3% for tenure of 20 years.