Pradhan Mantri Awas Yojana

Date : 1-March,2019|Read: 5 minsLast Updated : 1-August,2020

The Pradhan Mantri Awas Yojana is a flagship program of the current Honourable Prime Minister of India, Shri Narendra Modi. Under the PMAY program, a major credit linked subsidy scheme has been offered as an initiative dedicated to first time home buyers, envisioning the ‘Housing for All by 2022’ project of the government.


The credit linked subsidy scheme offered to citizens under PMAY is for four Income Groups:

  • Economically Weaker Sections (EWS)
  • Lower Income Groups (LIG)
  • Middle Income Group 1(MIG 1)
  • Middle Income Group 2(MIG 2)
Eligibility Family Income

EWS Rs 0-3 Lakhs

LIG Rs 3-6 Lakhs

Rs 6 Lakhs – 12 Lakhs Rs 12 Lakhs – 18 Lakhs
Carpet Area (sqm) 30 sqm/ 60 sqm 160 200
Max Loan Amount Rs 6 Lakhs Rs 9 Lakhs Rs 12 Lakhs
Interest Subsidy (%) 6.5 4.0 3.0
Max Subsidy (Rs) 2.67 Lakhs 2.35 Lakhs 2.30 Lakhs
Validity of Scheme 31 March 2022 31 March 2020 31 March 2020
Woman Ownership Mandatory Not Mandatory Not Mandatory

The PMAY scheme provides Central assistance to Urban Local Bodies (ULBs) and private development agencies through states through 4 schemes.

  1. Uses land as a resource through private developers to facilitate In-situ Rehabilitation of existing slum dwellers
  2. Credit Linked Subsidy
  3. Affordable Housing in Partnership
  4. Subsidy for beneficiary-led individual house construction/enhancement.

From the above four, the Central Sector Scheme will cover Credit Linked Subsidy component and the other ones will be Centrally Sponsored Schemes.


  • An upfront benefit of Interest subsidy for the outstanding principal amount
  • The subsidy on interest can be availed for a tenure of 20 years at maximum or tenure opted by the borrower (whichever is lower).
  • There is no cap on the loan amount or on the cost of the property.
  • The Net Present Value (NPV) of the interest subsidy is valued at a discounted rate of 6.5%
  • The additional loan beyond the specified limits, if any will be at a non-subsidized rate.


This Yojana is focused majorly on First time home buyers but the other schemes that are a part of it also promote upgrading,0 renovation in case of Kaccha to Pucca Homes.

The rule for middle-income groups says, "The beneficiary family should not own a pucca house and the beneficiary family should not have availed of central assistance under any housing scheme from Government of India." A beneficiary family will comprise of husband, wife, unmarried sons and/or unmarried daughters. To avoid duplication, beneficiary family members have to provide their Aadhaar numbers while applying for the loan.
Even if children (married or unmarried) are staying with their parents in a house owned by the parents (or on rent, in the same or another city), they can opt for PMAY provided they are earning and don't own any other home. Also, for a married couple living on rent and even if their parents own a home, they are treated as a separate household. So, if they wish to avail PMAY benefits, they will be eligible for a single house, bought by either of the spouses or both together in joint ownership.

Promoting cooperative federalism, this scheme offers flexibility to the States for choosing the best amongst the four verticals of the mission apt for the demand for housing in respective states. States have autonomy in project formulations and awarding approvals in accordance with the Guidelines so that projects can be formulated, approved and implemented speedily.

Also, as per the under the ‘Housing for All Mission’, a Sub-Mission has been set up to facilitate the adoption of modern, innovative and green technologies and building material for faster and quality construction of houses, preparation and adoption of Layout designs and Building plans apt for various geo-climatic zones which will assist States/Cities in deploying disaster resistant and environmentally friendly technologies and ensuring top quality development.

After falling short of the set target for 2019, the government has proactively promoted new technologies of construction which are set to speed up construction as the target of completion for this project is 2022. Expert’s View

  • The credit linked subsidy scheme is a landmark scheme dedicated to First time home buyers to ensure everyone owns a home.
  • The interest rate offered by this scheme at a record 6.5% compared to the market price of 9% or above is a big money saver.
  • Also, this scheme which was introduced in 2015 and later extended to middle-income groups in 2017 aiming to promote quality and affordable housing for new home buyers.
  • We urge buyers to avail the unique benefits of this program which has already boosted the real estate scenario and continues to boost it further.
  • We at look forward to helping buyers in these perspectives depending on their eligibility.

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