There was a time when some people saved for a lifetime and eventually would get to buy a home at the far end of life. While for others, buying a home still remained an unfulfilled dream, especially those with comparatively lower income.

Most of them restricted themselves to living in rented homes only. The good news is that those days are a thing of the past and we now have Pradhan Mantri Awas Yojana (Urban) or PMAY (Urban) under the Housing For All (Urban) Mission. Major Indian banks like Bank of Baroda are helping the cause, by making home loans available under the aforesaid scheme.

People from Economically Weaker Sections (EWS), Lower Income Group (LIG) & Middle Income Group (MIG) are covered under the scheme. This is part of the government’s ambitious National Housing Mission to provide “Housing for All” by 2022.

PMAY primer National Housing Mission is being implemented through four verticals of central and state governments. Out of these, one vertical is the Affordable Housing through Credit Linked Subsidy Scheme (CLSS) and is applicable for banks. It is also being monitored by Ministry of Housing & Urban Poverty Alleviation.

PMAY for EWS If the household annual income of the borrower is up to Rs 3 lakh and the proposed house size of 30 square metre, he or she qualifies to be in the EWS category.

PMAY for LIG The borrower is categorised to be in LIG with an annual income of Rs 3-6 lakh and house size of 30-60 square metre.

Under CLSS, interest subsidy of 6.5% is available on the housing loans that may be availed by beneficiaries belonging to EWS and LIG categories. The subsidy is provided to the loan component of up to Rs 6 lakh.

Now every Indian can access affordable housing under PMAY scheme, with banks like Bank of Baroda coming forward and lending a helping hand.

Beneficiaries PMAY has defined the people who can benefit from the central assistance in the concessional loan scheme applicable for urban areas according to the 2001 Census. In a family, it includes husband, wife, unmarried sons and daughters. Importantly, the borrower shouldn’t own a pucca house in his or her name or in the name of any of the family members in any part of India.

PMAY for Middle Income Group (MIG) The affordable housing scheme also covers MIG. This is a fairly important feature given the fact that about four out of the every 10 Indians will be living in cities by the end of this decade.

MIG has been further sub-classified into two sub-groups:

• MIG I Households with annual income in the Rs 6-12 lakh fall in this category. Houses of up to 160 square metre is an additional criteria.
• MIG II Households with a higher annual income in the Rs 12-24 lakh fall in this category. Houses of up to 200 square metre is an additional criteria.

The interest subsidy for loan in MIG I and MIG II categories are 4% and 3%, respectively. Of course, the subsidy is applicable in MIG I category is for loans up to Rs 9 lakh and it is up to Rs 12 lakh in MIG II category. This is irrespective of the loan size and for a period of 20 years or the loan term, whichever is less. The good news is that the subsidy payment is payable upfront in both the schemes.

PMAY’s varied use The great thing about PMAY is that it can be availed for a variety of purposes from building or purchasing a house or a flat, buying a residential plot of land and constructing a house to extending an existing house. There is also a provision of reimbursement of construction costs with money from own sources. Last but not the least, home loans under PMAY can be availed after takeover of eligible home loans from other banks and financial institutions.

Clearly, PMAY is not just another home loan scheme. It takes home buying to the lowest rung in the masses and ensures that low income doesn’t come in the way of dreaming about owning one’s own home and enjoying its benefits like a proud home owner. Now every Indian can buy a home with the help of PMAY, with banks like Bank of Baroda lending a helping hand by facilitating affordable housing home loans.