Dream come true: Buying a house just got easier with PMAY
A new government scheme is here to provide affordable housing to nearly 50 million Indians by 2022.Updated: Nov 27, 2017 16:48 IST
Buying a house is like a dream come true. When you buy a house, not only do you secure your own future, but also secure the future of your loved ones. Owning a house can give you great joy, happiness, and the peace of mind you deserve. However, these dreams are often overshadowed by financial problems. Investing in a house requires a lot of planning and savings. Some choose to go with a home loan to turn their dreams into reality.
Sometimes, the high rates of interest associated with the home loan create financial instability for people who wish to buy their own houses. To make things easier, the Indian government has introduced the Pradhan Mantri Awas Yojana (PMAY) under the Credit Linked Subsidy Scheme, which aims at ‘Housing for all by 2022’. This particular scheme is specifically designed to offer affordable housing loans for MIG (Middle Income Group), LIG (Low Income Group) and EWS (Economically Weaker Section). Any household that does not have a pucca residential house in this country can avail a home loan under the Pradhan Mantri Awas Yojana to buy a dream house.
Facts you need to know about PMAY
Term and tenure – The maximum term that can be availed under the Pradhan Mantri Awas Yojana never extends beyond 60 years or the retirement age. The loan term for self-employed people can go up to 70 years of age. The tenure of the home loan can range between 1 year and 30 years.
Amount of loan – There is no cap on the amount of loan offered by most of the banks. Some banks, however, have a maximum limit defined for each of the categories – EWS, LIG, and MIG 1 and 2.
Interest subsidy – For LIG and EWS, the maximum household income can be up to Rs.6 lakh. The interest subsidy that can be availed by these 2 groups is 6.50%. On the other hand, the household income for MIG 1 can range between Rs.6 lakh and Rs.12 lakh, and the household income for MIG 2 can range between Rs.12 lakh and Rs.18 lakh. The interest subsidy that can be availed by MIG 1 and MIG 2 are 4% and 3%, respectively.
Easy repayments – There are two options that you may choose to repay your home loan debt:
■ PDCs or post-dated cheques that are drawn on your salary account and savings account.
■ Electronic Clearing Service or ECS based on the instructions given to the bank.
Tax benefits – Indian residents can enjoy tax benefits on both interest and principal components of their home loan. According to the Income Tax Act, 1961, Rs.2 lakh is the applicable exemption, under section 24 (b), for the interest amount. Up to Rs.1.5 lakh is eligible for tax exemption under Section 80C for the principal amount.
Single application and joint application – You may choose to apply for the home loan all by yourself. However, if you wish to enhance your home loan application, you may choose to apply for the home loan with an earning co-applicant. In case of EWS and LIG, female ownership of the property is mandatory. But in case of MIG 1 and MIG 2, property ownership by a female is not mandatory.
Can you apply for PMAY?
Before you apply for a home loan, you must understand if you are eligible for it or not. The eligibility criteria for PMAY are mentioned below:
●The applicant/applicants must be first-time home purchasers and should be the ones using the property. The applicant of the loan should not have opted for any state government or central government subsidy for housing under the Pradhan Mantri Awas Yojana.
●Individuals belonging to the Middle Income Group cannot avail loan under this scheme for renovation or improvement purchases.
●The property being purchased should be located in an urban area.
●The individual applicant of the housing loan must not own any other property under his/her name or jointly with any other family member/dependant.
Making the most of subsidies!
The maximum subsidy that can be availed by Economically Weaker Section is Rs.2.67 lakh. Individuals who are part of MIG 1 and MIG 2 can avail maximum subsidy of Rs.2.35 lakh and Rs.2.30 lakh, respectively.
What you need to submit:
●Photograph and KYC documents for all the applicants.
●IT returns along with past 2 years’ bank statement for self-employed applicants.
●Salary slip and updated bank statements for all the salaried applicants.
●Proof of income
How much can you build?
The maximum carpet area that can be availed by the Low Income Group and Economically Weaker Section is 60 sqm. MIG 1 and MIG 2 can avail a maximum carpet area of 90 sqm and 110 sqm, respectively.
How to apply under PMAY?
The Housing and Urban Development Ministry has come up with a simple procedure that allows individuals to apply for a home loan online. There are two pages on the official website that must be filled up by the applicant.
Page 1 – This page needs the applicant to enter his/her Aadhaar number. After the verification of the Aadhaar number is done, the online application proceeds to the following page. The Aadhaar number is used for the verification of the applicant so that no fraudulent activity can take place.
Page 2 – This page needs the applicant to fill up all his/her personal details. They include the state that they reside in, present residential address, name of the family head, etc.
PMAY online application for slum dwellers:
A slum is defined as an area where approximately 300 people or 70 households stay in ill-constructed residences. These areas have extremely unhygienic environment and lack sanitation, facilities, clean drinking water, and proper infrastructure. However, the government ensures that these people can also apply under PMAY online.
The steps for PMAY application online for the slum dwellers are mentioned below:
●Log on to the official website of PMAY.
●Click on the drop-down that says ‘Citizen Assessment’.
●Choose the option that says ‘For Slum Dwellers’.
●Enter Aadhaar number.
●Click on the submit button.
●On the next page, enter all the necessary details like name, number of family members, income, address, religion, etc.
●Type the captcha code and click on the submit button.
‘Housing for all by 2022’ under the Pradhan Mantri Awas Yojana aims at providing homes (pucca houses) to more than 18 million people in the urban areas and 30 million people in the rural areas by 2022. Several houses have already been built as per the scheme and many more are being constructed.
First Published: Nov 27, 2017 16:46 IST