Pradhan Mantri Awas Yojana (PMAY)

What is PMAY

The Mission will be implemented during 2015-2022 and will provide central assistance to Urban Local Bodies (ULBs) and other implementing agencies through States/UTs for:
1. In-situ Rehabilitation of existing slum dwellers using land as a resource through private participation
2. Credit Linked Subsidy
3. Affordable Housing in Partnership
4. Subsidy for Beneficiary-led individual house construction/enhancement.
Credit linked subsidy component will be implemented as a Central Sector Scheme while other three components will be implemented as Centrally Sponsored Scheme (CSS).

A beneficiary family will comprise husband, wife, unmarried sons and/or unmarried daughters. 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 to be eligible to receive central assistance under the mission.
States/UTs, at their discretion, may decide a cut-off date on which beneficiaries need to be resident of that urban area for being eligible to take benefits under the scheme.
Mission with all its components has become effective from the date 17.06.2015 and will be implemented upto 31.03.2022.

EWS households are defined as households having an annual income up to Rs.
3,00,000 (Rupees Three Lakhs). States/UTs shall have the flexibility to redefine
the annual income criteria as per local conditions in consultation with the Centre.

An all weather single unit or a unit in a multi-storeyed super structure having
carpet area of upto 30 sq. m. with adequate basic civic services and infrastructure
services like toilet, water, electricity etc. States can determine the area of EWS
as per their local needs with information to Ministry

LIG households are defined as households having an annual income between
Rs.3,00,001 (Rupees Three Lakhs One) up to Rs.6,00,000 (Rupees Six Lakhs) andHouse size will be upto 60 sq.m
States/UTs shall have the flexibility to redefine the annual income criteria as per
local conditions in consultation with the Centre.

Credit-Linked Subsidy Scheme
The Mission, in order to expand institutional credit flow to the housing needs of urban
poor will implement credit linked subsidy component as a demand side intervention. Credit linked subsidy will be provided on home loans taken by eligible urban poor (EWS/LIG) for acquisition, construction of house.
Beneficiaries of Economically Weaker section (EWS) and Low Income Group (LIG) seeking housing loans from Banks, Housing Finance Companies and other such institutions would be eligible for an interest subsidy at the rate of 6.5 % for a tenure of 15 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 %.

  1. Under the subsidy scheme, middle-income group beneficiaries with annual income of above Rs.6 lakh and up to Rs.12 lakh get an interest subsidy of 4 per cent on a 20-year loan component of Rs. 9 lakh.
  2. Those with loan component exceeding Rs. 12 lakh and up to Rs. 18 lakh would get interest subsidy of 3 per cent.
  3. Additional loans beyond the specified limit, if any, will be at non-subsidised rate.
  4. Interest subsidy will be provided on loans for construction/acquisition of house with carpet area of up to 90 sq metres for those with income of up to Rs. 12 lakh per year and of up to 110 square metres for those earning between Rs. 12 lakh and Rs. 18 lakh per year.

Interest subsidy will be credited upfront to the loan account of beneficiaries through lending institutions resulting in reduced effective housing loan and Equated Monthly Instalment (EMI).
Credit linked subsidy would be available for housing loans availed for new construction and addition of rooms, kitchen, toilet etc. to existing dwellings as incremental housing. The carpet area of houses being constructed or enhanced under this component of the mission should be upto 30 square metres and 60 square metres for EWS and LIG, respectively in order to avail of this credit linked subsidy. The beneficiary, at his/her discretion, can build a house of larger area but interest subvention would be limited to first Rs. 6 lakh only.
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. Ministry may notify other institutions as CNA in future.

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