The Pradhan Mantri Awas Yojana, launched in 2015, was a decisive move by the Government of India against the skyrocketing property prices. This scheme brought the much-needed respite for first-time homebuyers who were struggling to find affordable housing options through subsidised home loans.
Since its inception, the scheme has undergone many changes to include more beneficiaries under its fold and offer exciting features to first-time homebuyers. If you’re looking to buy your first home, here are some recent revisions in the PMAY scheme to keep you updated.
Exclusion of MIG (Middle-income Group) from the list of PMAY beneficiaries
31st March 2021 was the last date for the MIG (Middle Income Group) to complete their PMAY application. Therefore, those with a household income of Rs. 6 lakhs to Rs. 18 lakh are no longer eligible for the home loan interest rate subsidy of Rs. 2.35 lakh.
However, the EWS (Economically Weaker Section) and LIG (Lower Income Group) beneficiaries can still apply for a PMAY subsidy of Rs. 2.67 lakhs, as the government has extended their deadline till 31st March 2022.
Hike in budget allocation
In the recent 2021-22 budget, a whopping Rs. 8,000 crore was allotted to the Pradhan Mantri Awas Yojana scheme, an 8% jump from the 2019-20 budget. The reason behind this hike is the implementation of the Affordable Rental Housing Complexes (ARHC) scheme under the Aatmanirbhar Bharat project. Under this scheme, the government will convert some of its projects to affordable housing through a public-private partnership.
Moreover, the government will also streamline the issuance of credit and permits, thereby encouraging construction on private lands. As a result, urban migrants, who usually have to settle in unauthorised colonies and informal settlements, will have decent housing options to choose from.
Allowance of increased carpet area
In June 2018, the government increased the carpet area allowance for all eligible houses under PMAY, bringing more beneficiaries under its fold. Earlier, subsidies were only issued to MIG beneficiaries for a house with a carpet area up to 1,614 sq. ft. Now, the Middle Income Group can get an upfront subsidy of Rs. 2.35 lakhs for a home of up to 2,100 sq. ft, which is more than a 25% increase.
With this increase in allowance, MIG beneficiaries who have already applied for PMAY can buy a bigger, better house. And at the same time, enjoy the subsidy on home loan rates.
In conclusion
These revisions in the PMAY scheme will encourage more home buyers to go ahead and realise their dream of buying a home. If you, too, are a first-time homebuyer planning to buy your dream home, the time is ripe to make the most of the PMAY’s benefits and opt for housing finance. However, before you visit a lender, make sure to check whether you’re fulfilling both PMAY’s and home loan eligibility criteria.
Lastly, don’t forget to plan out your repayments using a home loan EMI calculator and keep your expenses under budget.