Everyone wants a place they can call home. Some buy it for investment purposes, some want it to get stability in life, while some want it for their family. The reason can be different but the problem most of the people face is at the time of arranging money. The first option that comes to people’s mind is a home loan. However, there are additional considerations if you are planning on taking out a home loan. The first thing that needs to be considered is the financial aspect. There are also some people who cannot afford to invest that much money. Pradhan Mantri Awaas Yojana, however, offers some good news to these people.
Prime Minister Narendra Modi announced a housing scheme in June 2015 to provide housing for all Indians, whether they live in rural or urban areas. As part of the Pradhan Mantri Awas Yojana (PMAY) , the government plans to construct affordable, concrete homes to replace slums. The idea behind is to make sure that even middle and lower income groups are able to afford homes and can make their so-called unachievable dreams come true.
Home loans can be subsidized for such individuals. Here’s everything you need to know about this futuristic system of housing loans
Replace kutcha house with pucca houses
Since a long time, kutcha houses (temporary houses) have plagued India’s metropolises and rural areas. Under the Pradhan Mantri Awas Yojana, the government plans to replace the ‘kutcha’ houses with the permanent ones. This scheme is designed for people without houses and those living in kutcha houses or severely damaged houses. Construction of permanent houses will ensure they aren’t destroyed by natural calamities like storms, floods, rains and other natural disasters.
Basic size of the house
Under the Pradhan Mantri Awas Yojna, all houses should be constructed with at least 30 square meters of carpet area. This is as per the National Building Code standards. If the constructor is not able to follow the size rule, they have to take the consent of the beneficiary and the NBS, both.
Credit-linked Subsidy scheme
This scheme is for the economically weaker section and low income group who want to buy a house but cannot afford it. These people will be granted a subsidy on the home loan interest based on their salary and financial status. They will be entitled to receive an interest subsidy at a rate of 6.5%, either for the first 20 years of the loan or for the entire loan period.
Clauses of construction
PMAY houses must comply with RERA (Real Estate Regulatory Authority) guidelines. This states that only high-quality raw materials will be used for the construction so that there is no need for reconstruction or remodeling till at least 5 years. If any discrepancy is found out, then the builder will be entitled to do the complete repair work for free within a month.
The eligibility to avail the benefits of this yojna are based on the salary defined below.
Pradhan Mantri Awas Yojana Eligibility Criteria
|Section||Annual Family Income||Maximum carpet area|
|EWS||Rs.3 lakh||60 square meters (645.83 square feet)|
|LIG||Rs.6 lakh||60 square meters (645.83 square feet)|
|MIG1||Rs.6 lakh to Rs.12 lakh||160 square meters (1722.33 square feet)|
|MIG2||Rs.12 lakh to Rs.18 lakh||200 square meters (2152.78 square feet)|
Instead of getting the pre-constructed houses under PMAY, people can also apply for home loans under this scheme. However, this does not apply to the LIG and Economically Weaker Section.