Guide to PMAY- finance, eligibility, provisions, and more

There are a few things to keep in mind if you’re interested in buying a home under the Pradhan Mantri Awas Yojana-Urban, or PMAY (U) scheme. When you plan your down payment, choose a location, builder, and home loan provider.

The Middle Income Group (MIG) Credit Linked Subsidy Scheme (CLSS) for MIG I and MIG II, which was originally authorized for implementation in 2017, has been extended until March 2020. However, on May 14, 2020, the government stated that the deadline for the affordable housing CLSS scheme will be extended for one year, until March 2021.

What is Pradhan Mantri Awas Yojana (PMAY)?

The Government of India launched the Pradhan Mantri Awas Yojana (URBAN)-Housing for All mission to increase homeownership. A subsidy plan known as the Credit Linked Subsidy Scheme (CLSS) was launched as part of this objective to give interest discounts on loans taken out for the purchase, construction, expansion, or repair of a home. Given the predicted increase of urban and the resulting housing demands in India, the PMAY scheme caters to the Economically Backward Section (EWS)/Lower Income Group (LIG) and Middle Income Groups (MIG) of the country.


  1. The scheme’s primary objective is to provide homes for everyone. As a result, it’s understandable anybody who already owns a home, or who has a family member who owns a home, is not eligible for PMAY benefits.
  2. “The eligible family should not own a pucca home and should not have received central government help from India under any housing project,” the guideline adds. A recipient family will include a husband and wife, as well as unmarried boys and/or daughters. Beneficiary family members must supply their Aadhaar numbers while applying for the loan to avoid duplication.
  3. “An adult earning person can be classified as a distinct household if he or she does not own a pucca dwelling in his or her name in any part of India,” the rules state.
  4. Even if their parents own a home, a husband and wife living on rent will be treated as a separated household. If they want to take advantage of PMAY benefits, they must buy a single home, which can be purchased by either spouse or jointly by both.

Pradhan Mantri Awas Yojana Features and Benefits:-

  •     All applicants of the PMAY Scheme receive a subsidized interest rate of 6.50 percent per annum on home loans for        20 years.
  •     Ground-floor allotment will be preferred for differently-abled and senior citizens.
  •     Construction would be done with eco-friendly and sustainable technologies.
  •     The scheme covers the whole country’s urban areas, including 4041 statutory towns, with 500 Class I cities receiving priority. 
  •     The credit-linked subsidy aspect of the PM Awas Yojana is implemented in all statutory towns in India from the beginning.


Individuals in the MIG – I category would receive a 4% interest subsidy on loans amount of Rs 9 lakh, while those in the MIG – II slab category will receive a 3% subsidy on loans up to Rs 12 lakh.

If an extra loan is required, the lender will make it available, but any additional loans over the subsidized loan amount will be charged at a non-subsidized rate.

How does it work properly:-

Assume that a person in MIG II wishes to buy a house for Rs 60 lakh. The remaining Rs 48 lakh may be financed with a loan after the mandatory minimum down payment of 20%, or Rs 12 lakh. Under PMAY, however, a 3% subsidy is available up to Rs 12 lakh, after which the lender’s house loan interest rate will apply to the balance of Rs 36 lakh.

Budget 2017 gave affordable homes infrastructure status, which should make it much easier for developers to reap the advantages. The prompt delivery of a house, but on the other hand, remains a faraway dream for the common citizen. Builders used to finish affordable housing projects in 3 years to qualify for the benefits, but now (Budget 2017) they have completed them in 5 years. Even if you’re a first-time time homebuyer, tread carefully and consider all of your alternatives before venturing into the affordable housing segment.