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Home loan EMIs under Pradhan Mantri Awas Yojana for middle-income groups: Eligibility, interest, preference to women

In his new year's eve address Prime Minister Narendra Modi announced Pradhan Mantri Awas Yojana (Urban) for middle-income groups. And now, the government has come up with the scheme related guidelines.

BT Online | May 22, 2017 | Updated 16:59 IST
Home loan EMIs under Pradhan Mantri Awas Yojana for middle-income groups: Eligibility, interest, preference to women

In his new year's eve address Prime Minister Narendra Modi announced Pradhan Mantri Awas Yojana (Urban) for middle-income groups. And now, the government has come up with the scheme related guidelines.

This interest subsidy scheme has been named as 'Credit Linked Subsidy Scheme for Middle Income Groups - CLSS(MIG)'.

According to the Credit Linked Subsidy, which is a part of the PMAY scheme, middle-income groups with incomes in the eligible range will get an interest rate subsidy of 3-4 per cent.

Initially, the scheme will be implemented for a period of one year.

Here is all you need to know about Pradhan Mantri Awas Yojana (PMAY):

Eligibility:

  • Middle Income Groups (MIG) which fall under the bracket of  annual incomes of above Rs 6 lakhs to Rs 18 lakhs are eligible for interest subsidy on housing loans under the new CLSS(MIG).
  • People whose housing loans have been approved and whose applications are under consideration since January 1,2017 are also eligible for it.
  • In his new year address, Prime Minister Modi had announced interest subsidy of four per cent on housing loans of up to Rs 9 lakhs for people with an annual income of Rs 12 lakh. For those earning Rs 18 lakh per year, they are eligible for three per cent subsidy on housing loans of up to Rs 12 lakh.


EMI and interest on the loan

 

 

  • The tenure of loan has been specified maximum to be of 20 years or whatever preferred by the beneficiary, whichever is lower.
  • The total interest subsidy accruing on these loan amounts will be paid to the beneficiaries up front in one go which would reduce the burden of EMI on the user.
  • Sriram Kalyanaraman, MD and CEO of National Housing Bank informed that interest subsidy of four per cent under CLSS(MIG) will bring down EMIs of beneficiaries by Rs 2,062 per month on a housing loan of Rs 9 lakh and interest subsidy of three per cent would lower the EMI by Rs 2,019 on a loan of Rs 12 lakh, taking normal housing loan interest rate as 8.65 per cent.
  • The total interest subsidy to be paid under MIG group for loan up to Rs 9 lakh is Rs 2.35 lakh and on a loan of Rs 12 lakh, it comes to Rs 2.30 lakh per beneficiary.
  • The scheme defines the beneficiary family as the one with a wife, husband and unmarried daughters and sons. For acquisition/construction of a new house including repurchase, the scheme has made even unmarried and earning young adults eligible for taking the benefit of the said scheme.  

Preference to women:

 

 

  • Under the guidelines, preference is to be given to women. Widows, single working-women, persons belonging to scheduled castes and scheduled tribes, backward classes, differently abled and transgender people will be given preference.

Small Finance Banks and Non-Banking Finance Company, Micro Finance Institutions also have been recognized to function as Primary Lending Institutions to widen the scope of implementation of CLSS(MIG).

 

On Wednesday, 70 lending institutions including 45 housing finance companies, 15 scheduled banks, regional rural and cooperative banks signed MoUs with National Housing Bank for implementation of the scheme for the middle class in urban areas.



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