Considering taking a Home Loan under the PMAY scheme? Here’s some crucial information that you should be aware of.

Aspiring to have a home of your own is a dream that everyone nurtures. With the recent RBI cut in repo rates (i.e. the rate at which the RBI lends to commercial banks) by 25 basis points, banks will pass on this benefit to borrowers by slashing their lending as well as deposit rates. This means that Home Loan rates will also fall. Banks like the State Bank of India have already cut rates by 5 basis points. So there’s probably not a better time to avail a Home Loan. To encourage home-buyers, the central govt. introduced the Pradhan Mantri Awas Yojana (PMAY) in 2015 with the goal of making housing affordable for the urban poor. The govt. launched the “Credit-Linked Subsidy Scheme” (CLSS) under the PMAY with the mission of ensuring housing for all by 2022-when the nation would have completed 75 years of independence.

If you’re looking to own a home under the PMAY scheme, here are a few important things that you should be aware of:

Beneficiaries Of The Scheme:

Only people who meet the following conditions are eligible to avail a Home Loan under the PMAY scheme:

• The beneficiary family will comprise the husband, wife, and unmarried sons/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.

Additional Reading: 6 Things To Consider Before You Opt For A Home Loan

Applicant Groups:

The PMAY scheme divides applicants into four groups:

• Economically Weaker Section (EWS)
• Light Income Group (LIG)
• Medium Income Group (MIG I)
• Medium Income Group (MIG II)

Applicants under the EWS group should have a household income of up to Rs. 3 lakh and those under the LIG group should have a household income between Rs. 3-6 lakhs. The MIG I will comprise households having an annual income below Rs. 12 lakh and for MIG II, it should be between Rs. 12-18 lakh.

While the beneficiaries of the EWS category are eligible for complete assistance under the scheme, beneficiaries from the LIG and MIG categories are only eligible for the Credit-Linked Subsidy Scheme (CLSS) under PMAY. In order to classify as a LIG or EWS beneficiary under the scheme, the applicant will have to submit an affidavit as income proof to the authority.

Additional Reading: 7 Things We Bet You Didn’t Know About Your Home Loan

 Subsidy:

The PMAY scheme lays down that beneficiaries under the MIG I category will get an interest subsidy of 4% on a loan amount of up to Rs. 9 lakh. Beneficiaries under the MIG II category will get a 3% subsidy on a loan amount of up to Rs. 12 lakh.

Area Of The House:

Under the PMAY, while the area of the house varies from one category to another but it is the carpet area that is taken into consideration while determining the eligibility under this scheme. For MIG I, the carpet area is to be 90 sq. metre (968.72 sq. ft.) and for the MIG II category, the carpet area is 110 sq. metre (1184.03 sq. ft.). In June 2018, to further make housing affordable, the Ministry of Housing and Urban Affairs approved the revision of the carpet area of houses eligible for interest subsidy under the Central Linked Subsidy Scheme (CLSS) for the MIG I category from “up to 120 sq. metre” to “up to 160 sq. metre” and, in respect of MIG II from “up to 150 sq. metre” to “up to 200 sq. metre”.

So what does the carpet area really mean? Carpet area is the area enclosed within the walls i.e. actual area to lay the carpet. This area doesn’t include the thickness of the inner walls. If you add up the outer walls, balcony and other common areas, it’s the built-up area. You get the super built-up area when space for lobbies, stairs, elevators etc. are added. Unfortunately, builders are charging buyers on the super built-up area, a practice that RERA is looking to scrap by mandating that buyers pay only for the carpet area.

Additional Reading: Are You Well-Seasoned With Home Loan Terminology?

Loan Application:

One can avail a Home Loan under the PMAY scheme from any primary lending institution such as scheduled commercial banks, housing finance companies, regional rural banks, state co-operative banks, non-banking financial companies etc. There will be no processing fees for eligible housing loan amount as per the income criterion under the scheme. In case you apply for additional loan amounts beyond the eligible loan amounts for interest subsidy, lenders will charge the standard processing fees.

Documents to Be Submitted Under PMAY:

1. Duly filled application form
2. Self-attested income certificate (needed if you fall below the taxable limit) and income proof/salary slip
3. ID proof-PAN Card/Aadhaar No. /Voter’s ID, Driving License etc.
4. Copy of address proof
5. Latest IT return/Form 16
6. Bank account statement of the last six months
7. Valuation certificate
8. Approved plan of construction
9. Certificate for architect or engineer confirming the cost of construction/repairs
10. Architect’s certificate regarding the life and fitness of flat/house in case of purchase
11. Agreement for construction with builder/developer
12. NOC from housing society or any competent authority
13. Receipt of advance payment made to builder/seller
14. An affidavit from the applicant confirming that neither they nor any family member owns a pucca house in India
15. Property papers such as Letter of Allotment of Property/Agreement

Subsidy Scheme Application:

Here are the steps you’ll need to follow to apply for the subsidy scheme under the PMAY scheme:

1. Visit the official website of PMAY: http://pmaymis.gov.in/
2. Under the “Menu” section, find the “Citizen Assessment” option
3. Enter your 12-digit Aadhaar Card number
4. Once you’ve entered your Aadhaar number, you’ll be redirected to the application page
5. In the application page, you’ll be asked to enter your personal details like your income, current residential address, and your bank account details
6. Enter all the information as is requested
7. Click on “I am aware of” option at the end of the page and then click the “Save” button
8. Once you click the “save” option, a system-generated application will be generated that you can save for future reference
9. Download and print the duly-filled application form
10. Submit the form at your nearest CSC office centres and financial institutions/banks along with the required documents

Before you fill the PMAY scheme application, make sure you’ve checked your eligibility and your name is listed in the beneficiary list. You can check if you’re eligible by submitting your BPL certificates to the lending institution and they will notify you if you are eligible to apply for PMAY. Alternatively, you can also check the list of beneficiaries online by visiting the official website. The list of beneficiaries available on the website is periodically updated. Remember to check the recent list. Some of the points to note about PMAY are that your PMAY application is rendered invalid if the applicant or anyone from his/her family owns a pucca house in India. Also, priority is given if the applicant is a woman and the sole breadwinner of the family.

Planning to buy a home soon? Get starting by checking offers online-Home Loan offers on BankBazaar start at 8.7%.

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