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Guidelines on Pradhan Mantri Awaas Yojana

In the 10th edition of 'Dhan ki Baat', Monu Ratra, CEO, India Infoline Housing Finance Ltd. informs about the benefits of Pradhan Mantri Awaas Yojana.

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Pradhan Mantri Awas Yojana – Affordable Housing for All

"Pradhan Mantri Awas Yojana – Housing for All (Urban)" takes you closer to your dream of owning a house. It provides you with the requisite support needed to build a home. The project will be implemented till 2022 and it provides central assistance to implementing agencies for providing houses to all eligible families/beneficiaries.

The mission seeks to address the housing requirement of the urban poor including slum dwellers through following programme verticals:

  • Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource
  • Promotion of Affordable Housing for weaker section through Credit Linked Subsidy Scheme (CLSS)
  • Affordable Housing in Partnership with Public & Private sectors
  • Subsidy for beneficiary-led individual house construction /enhancement.

Slum Rehabilitation

Under this program, slum redevelopment is implemented using Central or State Government's land as resource. Extra TDR/FSI/FAR is required to make these schemes financially operable.

Affordable Housing in Partnership

Under this program, housing provision to the economically weaker section is ensured by States and Union Territories by partnering with public and private sectors. This can be done through public agencies or even through private industries, etc. All EWS houses constructed under this program are eligible for Central Assistance to the tune of Rs 1.5 lakhs each.

Beneficiary-led individual house construction or enhancement

Under this category, families enjoy Central Assistance of Rs1.5lakh for the construction/enhancement of their houses. However, such projects need to be approved by SLSMC before commencement. The assistance amount is paid out by state governments in 3-4 installments depending on the construction status of the house. However, the last installment will be paid only after the construction is complete.

Credit Linked Subsidy Scheme (CLSS)

CLSS has two sub-schemes namely EWS/LIG and MIG (MIG 1 & MIG 2) based on Income Criteria of the Beneficiary family/household.

EWS/LIG - Scheme is effective from June 17, 2015 & valid till year 2022.

  1. Annual Household/beneficiary family Income shall not exceed Rs6lakh
  2. The beneficiary family should not own a pucca house either in his/her name or in the name of any member of his/her family in any part of India.
  3. Adult female head of the family/household shall be owner/co-owner in the property.
  4. The Carpet Area of the property shall be up to 30 & 60 sqmtr in case of EWS & LIG, respectively. However, beneficiary can construct a bigger house but the subsidy would be limited to 30 & 60 sqmtrs only.
  5. Property shall fall within the list of statutory towns.
  6. Beneficiary family is eligible for an interest subsidy at the rate of 6.5 % for a tenure of 20 years or during tenure of loan whichever is lower. The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9 %.
  7. Credit Linked Subsidy for EWS/LIG is available only for loan amounts upto Rs 6 lakhs and additional loans beyond Rs. 6 lakhs, if any, will be at non-subsidized rate.

MIG - Scheme is effective from January 01, 2017 which is valid till year 2019.

  1. Annual Household/beneficiary family Income shall be b/w Rs. 6-12 lakhs under MIG 1 & 12-18 Lakhs under MIG 2.
  2. The beneficiary family should not own a pucca house either in his/her name or in the name of any member of his/her family in any part of India.
  3. Female ownership advisable, however, not mandatory.
  4. Property shall fall within the list of statutory towns.
  5. The carpet Area of the property shall not exceed 120 & 150 sqmtr in case of MIG 1 & MIG 2 respectively.
  6. Beneficiary family is eligible for an interest subsidy at the rate of 4 % in case of MIG 1 & 3% in case of MIG 2 for tenure of 20 years or during tenure of loan whichever is lower. The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9 %.
  7. Credit Linked Subsidy for EWS/LIG is available only for loan amounts up to Rs 9 Lakh & 12 Lakh for MIG 1 & MIG 2 respectively and additional loans beyond the specified amount, if any, will be at non-subsidized rate.

Beneficiary Family/Household means Husband, wife and unmarried children. An adult earning member irrespective of its marital status be considered as separate household.

Setup

Housing and Urban Development Corporation (HUDCO) and National Housing Bank (NHB) have been identified as Central Nodal Agencies (CNAs) to channelize this subsidy to the lending institutions and for monitoring the progress of this component. Accordingly, the CNAs have entered into Memorandum of Understanding (MOU) with various PLIs.

CNAs MOU signed with PLIs for implementation of EWS/LIG MOU signed with PLIs for implementation of MIG
NHB 183 176
HUDCO 67 59
Total 250 235

Speaker's Profile

Monu Ratra

Monu Ratra

Mr. Monu Ratra is the CEO of India Infoline Housing Finance Ltd. Mr Ratra is a veteran in the mortgages industry with nearly two decades of experience. Mr Ratra has been associated with brands like HDFC Ltd., ICICI Bank and Indiabulls Housing. Prior to joining India Infoline Housing Finance Ltd., his last assignment was with Indiabulls HFC as National Business Manager. Mr. Ratra has been a part of the pioneering teams leading various functions to provide excellence through process and quality initiatives, contributing to industry-leading growth. While with the last company, his efforts and vision led to building of a growth sales structure, starting from a scratch, in a start up like environment.

At IIFL Home Loans, Mr. Ratra brings strong focus on developing and delivering customer satisfaction with ease and low turnaround time. Mr Ratra is passionate about building stronger businesses, adapting and aligning company with new technology and digital era, and maintaining everlasting culture of customer centricity.

Ask an Expert

FAQs

What is PMAY?

The Pradhan Mantri Awas Yojna, came into force in June, 2015 and will continue until 2022. This mission is to build 2 crore houses targeting all eligible poor families and beneficiaries across all states and union territories. The mission seeks to address the housing requirement of urban poor including slum dwellers through following programme verticals:

  • In –situ Slum Development - Using land as a resource with private participation
  • Affordable Housing Through CLSS – Interest Subvention Subsidy
  • Affordable Housing in Partnership - Central Assistance per EWS house in affordable housing projects where 35% of constructed houses are for EWS category
  • Subsidy for beneficiary-led individual house construction or enhancement

Except for the credit-linked subsidy (which falls under the Central Sector Scheme), rest all other programs are part of Central Sponsored Scheme. The states and the union territories have been given liberty to formalize and execute the scheme as per the standard guidelines defined by the mission so that it is implemented in a timely manner without any delay.

Housing Shortage in urban area (as per technical report of Ministry of Housing and Urban Affairs) is 18.78 million in 2012. 95-96% in EWS/LIG

What are the different types of schemes under CLSS

  1. EWS/LIG
  2. MIG 1 & MIG 2

What are Eligibility Parameters under various CLS schemes

  EWS LIG MIG 1 MIG 2
Annual Household Income Upto 3 Lakhs 300001- 600000 600001-1200000 1200001-1800000
No Pucca House anywhere in India Applicable Applicable Applicable Applicable
Female Ownership Mandatory Madatory Optional Optional
Carpet Area 30 Sqmtr* 60 Sqmtr* 120 sqmtr 150 sqmtr

Beneficiary may construct a larger house, however, interest subsidy would be limited to 30 and 60 sqmtrs only.

What is meant by household

Household means Husband, wife and unmarried children. An adult earning member irrespective of its marital status is considered as separate household. Hence, female ownership may not be available in individual case.

Is female ownership Mandatory?

Female ownership is mandatory under EWS/LIG scheme. Under MIG schemes female ownership is advisable, however, not mandatory.

Can property be purchased in any Area?

To get CLSS benefit, property shall be in Urban Area and within the statutory towns and planning Area list as notified from time to time.

There are approx 4315 towns & planning Area (approx) basis 2011 census and as notified from time to time.

What is the maximum tenure on which the PMAY subsidy is applicable?

PMAY subsidy is calculated considering maximum loan tenure of 20 years

Does the above statement means that loan shall be of 20 years max?

Loan can be of 25 or 30 years. 20 years is just a number used for calculation of subsidy.

What is the max subsidy?

EWS/LIG – 2.67 Lakhs
MIG 1 – 2.35 Lakhs
MIG 2 – 2.30 Lakhs

Please note that subsidy is dependent on two factors which are loan amount and Tenor.

How can an individual get Subsidy?

Subsidy is adjusted and reduced from the outstanding loan amount. If a Home loan customer meets all the eligibility criteria set out under EWS/LIG, MIG 1 and MIG 2 scheme, subsidy is transferred immediately on receipt from NHB. Customer is duly informed about the subsidy.

Is there any property area requirement?

  • EWS – Up to 30 Sqmtr. Beneficiary can build a larger house, however, interest subsidy would be limited to 30 sqmtrs only
  • LIG – Up to 60 Sqmtr. Beneficiary can build a larger house, however, interest subsidy would be limited to 60 sqmtrs only
  • MIG 1 – Up to 90 Sqmtr (Carpet Area)
  • MIG 2 – Upto 110 Sqmtr (Carpet Area)

What is Central Nodal Agency (CNA) and what is its role?

National Housing Bank(NHB) and Housing and Urban Development Corporation (HUDCO) have been identified as Central Nodal Agencies (CNAs) by Ministry of Housing and Urban Poverty Alleviation (MoHUPA) for the purpose of implementation of this scheme. As a part of the implementation process, every Primary Lending Institution (PLI) needs will tie up with one of these CNAs.

What is meant by PLIs and what is their role?

PLI means Primary Lending Institutions which would help beneficiary get subsidy thru CNAs. The subsidy would be adjusted in loan account of beneficiary.

Scheduled Commercial Banks, Housing Finance Companies, Regional Rural Banks (RRBs), State Cooperative Banks, Urban Cooperative Banks are PLIs as on date or any other institutions as may be identified by the MoHUPA.

Any preferential treatment to beneficiaries proposed for Affordable Housing through Credit Linked Subsidy scheme?

Preference under the Scheme will be given to Manual Scavengers, Women (with overriding preference to widows), persons belonging to Scheduled Castes/ Scheduled Tribes/ Other Backward Classes, Minorities, Persons with disabilities and Transgenders subject to beneficiaries being from EWS / LIG segments.

Whether state has the flexibility to fix the area for house under EWS/LIG category?

States/UTs have the flexibility in terms of determining the size of house and other facilities at the state level in consultation with the Ministry but without any enhanced financial assistances from Centre.

Whether a beneficiary can avail of benefit under more than one component?

No. Under the mission, a beneficiary family/household can avail of benefit of one component only that too once in lifetime.

Whether the customers required to submit the claim for availing interest subsidy directly to MoHUPA / NHB ?

Customers need not have to submit the claim neither to NHB nor to MoHUPA.

How the interest subsidy would be adjusted in the loan account ?

The interest subsidy would be paid by the Govt. which would be credited in the loan account upfront for lowering the EMI burden for the borrowers.

Is there any loan limit under this scheme?

There is no loan limit under this scheme. However, interest subsidy would be computed on first 6 lakhs, 9 lakhs and 12 lakhs for EWS/LIG, MIG 1 & MIG 2 respectively.

PLIs signed MOU: - EWS/LIG – total 250 PLI signed MOU till Oct 31, 2017.

  • NHB - 183
  • HUDCO - 67

MIG – Total 235 PLI signed MOU till Oct 31, 2017.

  • NHB – 176
  • HUDCO - 59

As on date NHB has disbursed subsidy to 63,434 beneficiaries /household with total subsidy of Rs. 1271 crore under CLSS.

Subsidy Process:

  • Individual Household
  • Identify the home in Urban Area
  • Apply for Home loan from approved PLI + affidavit for CLSS
  • PLI to approve the loan after due diligence and check the eligibility of CLSS
  • PLI to apply for Subsidy with Central Nodal Agency (NHB/HUDCO)
  • Approval of subsidy by CNA
  • Receipt of subsidy by PLI
  • Adjustment of subsidy amount in outstanding Home loan
  • Reduction of EMI of Home loan
  • Communication to beneficiary

Can customer close the loan immediately after receiving the subsidy?

Yes, the Beneficiary may close the loan after receipt of subsidy. In this case subsidy need not be refunded.