Home Finance How Does The Pradhan Mantri Awas Yojana Work?

How Does The Pradhan Mantri Awas Yojana Work?

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Home Loan

Due to the rise in population, housing is a significant crisis in the current Indian scenario. The government has taken measures through the Pradhan Mantri Awas Yojana (PMAY) to provide housing for all in the urban areas. 

So if you want holistic information to qualify for the eligibility for Pradhan Mantri Awas Yojana, continue reading!

What Is Pradhan Mantri Awas Yojana (PMAY)?

It is a radical social welfare scheme launched on 1 July 2015 to build two crore (20 million) reasonably priced houses by 31 March 2022 for the weaker sections of society. The rights to the house can be enjoyed solely by females and jointly with males. Also, it gets divided into two segments;

  1. Pradhan Mantri Awas Yojana – Urban (permanent houses for slum dwellers within the urban area)
  2. Pradhan Mantri Awas Yojana – Gramin (permanent homes for rural area dwellers)

How Does the PMAY Scheme Work?

Being a credit-linked subsidy scheme, through the PMAY, families can purchase homes at a lower cost, availing of interest subsidies. They apply to people belonging to the lower-income group, middle-income group, and economically weaker sections of society. 

However, people crossing an annual income above INR 18 Lakhs don’t come under the PMAY scheme. Here’s how the scheme works:

  1. Clearance of the down payment of the loan is mandatory.
  2. The subsidy is finalised depending on income earned by the family or individual on which the interest is fixed. 

Division of the Various Income Groups for PMAY

The annual income of individuals or families considered is classified as:

  1. Middle-Income Group-II – INR 12 Lakh to INR 18 Lakh/ annum
  2. Middle-Income Group- I – INR 6 Lakh to INR 12 Lakh/ annum
  3. Lower-Income Group – INR 3 Lakh to INR 6 Lakh/ annum
  4. Economically Weaker Sections – Up to INR 3 Lakh/ annum

These are the four groups that qualify for the subsidy. However, there is no difference for loan tenure of up to 20 years for all the classes. 

PMAY Eligibility Criteria

Before applying for the loan, be a home loan eligibility checker and consider whether you qualify for the following criteria;

  1. The maximum age required to qualify is up to 70 years.
  2. The beneficiary must not possess a ‘pucca’ house in their name across the country.
  3. The beneficiary must not have availed any assistance from the Central government and Primary Lending Institutions (PLIs)for PMAY subsidy. 
  4. If married, the spouse, the wife, or in joint ownership is eligible for a single subsidy. 
  5. A self-declaration has to be submitted along with proof of income and the property they want to acquire. 

Documents Required for the PMAY Scheme

If you meet the eligibility for Pradhan Mantri Awas Yojana, you must carry these documents to apply for the loan. It may differ for salaried and self-employed individuals. 

For Salaried Individuals

  • Download and fill out a website’s form
  • Produce proof of identity
  • Produce address proof
  • Submit a salary slip for the last two months and a bank statement for the previous six months for income proof
  • A copy of your property documents (agreement to sell, the allotment letter or buyer agreement, copy of receipts displaying any payments made to the developer)

For Self-Employed Individuals 

  • Address proof of the business’s existence (Establishment Certificate, SEBI certificate, PAN card registration certificate, sales tax, etc.)
  • Income proof showing the bank account statements of the last six months (both owner’s and the business) and ITR for the previous two years

The Application Process for the PMAY Scheme

Once you’ve passed the home loan eligibility checker, it’s time to apply. For those applying online, continue reading;

  1. Visit the official website of the PMAY, i.e., Pradhan Mantri Awas Yojana, and click the menu tab to tap the ‘citizen assessment’ option.
  2. Enter your Aadhaar number to get redirected to the application page.
  3. Now upload your income, personal, bank account details, and other important information.
  4. Recheck before submission and press save to get a unique applicant number.
  5. Download the filled application form and hand it over to the nearest financial institution or CSC office offering the PMAY scheme. Also, provide the necessary documents along with the form. 

Alternatively, go to the nearest authorized bank branch with the documents if you’re applying offline. 

Hurry and check out your eligibility for the Pradhan Mantri Awas yojana and avail exciting benefits!

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