Making the most of PMAY for EMI Reduction

“Housing for All” mission under the Pradhan Mantri Awas Yojana (PMAY) has two components—Pradhan Mantri Awas Yojana (Urban) (PMAY-U) for the urban poor and Pradhan Mantri Awas Yojana (Gramin) (PMAY-G and also PMAY-R) for the rural poor. It is an initiative by Prime Minister Narendra Modi and is set to be implemented during the years 2015-2022. This mission will provide central assistance to implementing agencies through the states and union territories. In this context, the Pradhan Mantri Awas Yojana (PMAY) Credit Linked Subsidy Scheme (CLSS) – ‘Housing for All’ is a home loan scheme which envisions Housing for All by the year 2022. Beneficiaries availing this scheme are eligible to avail interest subsidy on the purchase or construction of a house or the enhancement of dwelling unit and can speed up the prepayment of their home loan.

Eligibility Criteria

  • People belonging to the Economically Weaker Section (EWS), Low Income Group (LIG), Middle Income Group-I (MIG-I) and Middle Income Group-II (MIG-II) are eligible for this scheme
  • Age of the applicant must be 70 years old or less
  • Income range of the applicant must be below Rs 3 lakh per annum for economically weaker sections and between Rs 3 – 6 lakh per annum for lower income groups
  • Women who are citizens of India are eligible

Interest and EMI

At Indiabulls Home Loans, the company aims at providing highly attractive home loan rates to customers. The interest rates are suitably fixed keeping customers’ needs in mind and the in-house home loan EMI calculator quickly helps you calculate the variable interest rates for varying denominations.

  • For loan amount up to and including Rs 75 lakh, the variable rates are40% to 9.75%
  • For loan amount more than Rs 75 lakh and up to Rs 300 lakh, the variable rates are8.65% to 10.50%
  • For loan amount more than Rs 300 lakh, the variable rates are 8.80% to 11.25%

Coverage & Eligibility of PMAY

The ownership of the house should either be in the sole name of the female member of the household or joint ownership with the wife. However, this condition will not be made mandatory in cases of construction of a house on an existing plot or extension/renovation of existing kuccha/semi-pucca house.

The beneficiary family should not own a pucca house (an all-weather dwelling unit) either in his/her name or the name of any member of his/her family in any part of India.

The carpet area of the house under this Scheme should be upto 30 sq. mts. for EWS beneficiaries and up to 60 sq. mts. for LIG beneficiaries.

Credit Linked Subsidy is available for housing loans availed for acquisition/construction of house and repair/extension of kucha/semi Pucca house.

The maximum term of the loan on which the subsidy will be calculated is 15 years. Visit the Pradhan Mantri Awas Yojana page to know more.

Scope and Coverage

All statutory towns as per Census 2011 and towns notified subsequently will be eligible for coverage under CLSS for MIG. Planning Area as notifiedwith respect to the Statutory Towns and which surrounds the concerned Municipal area will also be covered under the Scheme to provide interest subsidy for Housing Loan beneficiaries belonging to Middle Income Groups (CLSS-MIG).

The credit linked subsidy @4% will be available for loan amount up to Rs 9 lakh in case of MIG-I and @3% for Rs 12 lakh in case of MIG-II. However, a NBFC can sanction Home Loans more than Rs. 9 or 12 lakh, but the subsidy will be restricted to Rs 9 or 12 lakh, as the case may be.

Under CLSS, an interest subsidy will be available for a tenure of 20 years or actual tenure of the loan, whichever is lower. However, the loan can be sanctioned for a maximum tenure of 30 years, but the loan has to be repaid before the borrower attains the age of 70 years. The Net Present Value (NPV) of or the subsidy will be calculated at a discount rate of 9% and will be credited upfront to the loan account.

Maximum subsidy eligible under CLSS-MIG(I) – Rs. 2.35 lakh (approx.)

Maximum subsidy eligible under CLSS-MIG(II) – Rs. 2.30 lakh (approx.)

Application Procedure

The borrower can apply for the Housing Loans and CLSS subsidy through the PLIs (Prime Lending Institutions), in this case, Indiabulls Home Loans. IBHL will perform due diligence and check the fulfilment of the eligibility criteria for the scheme. If the required criteria are satisfied, Indiabulls Home Loans will submit the borrower’s claim to Central Nodal Agency (CNA). The CNA processes the claim and releases the subsidy amount through IBHL. Indiabulls Home Loans thereafter, adjust the same by crediting to the borrower’s Loan account resulting in reduced loan outstanding and the effective EMI.

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