Owning a home is probably the best achievement for any individual .

For those who earn

handsome amount of money, this is not a big thing. But for financially weaker section this is a
big deal. Pradhan Mantri Narendra Modi has come forward to help such people under Pradhan
Mantri Awas Yojana . This Awas Yojana is of two type 1) Pradhan Mantri Awas Yojana
(Urban or Shehari) 2) Pradhan Mantri Gramin Awas Yojana (Rural). In this article, we are
focusing on Awas Yojana (Shehari).

Note If you are looking for details of Gramin Awas Yojana, Read this.

There is a lot to know about Pradhan Mantri Awas Yojana like what does it has to offer ? Who
can apply ? What is the procedure to apply and lots and lots of similar questions. Through this
article our aim is to provide every piece of information regarding this scheme. So, kindly read
the complete article to so that you can understand everything that is to know about this scheme.

Pradhan Mantri Awas Yojana

What is this Scheme ?

Prime Minister Narendra Modi has a vision. He wants that when the nation celebrates 75 years of
Independence i.e. in 2022, people has a reason to celebrate. He want to deliver Pucca houses to
financially weaker sections. To complete this huge task Pradhan Mantri Awas yojana scheme has
been released. Under this scheme affordable Pucca Houses with water facility, toilet facility,
24*7 electricity supply and access will be built.

How Pradhan Mantri Awas Yojana Operates?

This scheme is being carried out in 4 components. This means that there are 4 different types in
which this scheme will take place. These 4 components are

Transforming Slum Areas i.e. Slum Rehabilitation of Slum Dwellers -This

components will be carried out with the help of private developers using land as resource.

Credit Linked Subsidy

1. Under this component, weaker economical section will be given subsidy on home loans
taken by Urban Poor (EWS/LIG)

2. This subsidy will be available for the loans availed for new construction and addition of
rooms(kitchen, toilet etc.)

3. This subsidy will only be available for loan amounts upto 12 lakhs. For Loan of amount
more than 12 lakh, no subsidy will be given.
 Affordable Housing In Partnership This component is a supply side intervention.
Under this component, financial assistance to EWS (Economically Weaker Section)
houses being built with different partnerships by States/UTs/Cities, will be given

Beneficiary led Individual house construction or Enhancement Under this

component, assistance to eligible families belonging to EWS categories will be given.
This assistance will be given to either construct new houses or enhance the existing
houses on their own. A central assistance of Rs. 1.5 lakh will be given under this
component

This scheme will remain functional from 17th June 2016 to 31s March 2022

Who is Eligible to Apply Beneficiary or Target Group

Beneficiary i.e. the interested individual (or his/her family member) should not own a
pucca house. In simple terms it means that the applicant should be first time home buyer.

Only the applicants belonging to LIG (Lower Income Group) & Economically Weaker
Section (EWS) are eligible. Here is detailed info

EWS Annual income should not exceed Rs. 3 Lakhs per annum

LIG Annual income should not exceed Rs. 6 Lakhs per annum

Awas Yojana Carpet Area

The carpet area of the houses being constructed would be

For Economically Weaker Section (EWS) Applicants 30 square meters

For Lower Income Group (LIG) Applicants 60 square meters

Pradhan Mantri Awas Yojana Loan,Subsidy & Interest Rates

Earlier in this article, we discussed about Credit linked subsidy. In this section we will discuss
about it in details and we will also discuss about the Awas yojana loan.

Loan
Interest Rate Notes
Amount
Upto 6 This interest rate is fixed. It would not have any effect from
6.5 per annum
Lakhs RBI rate
This depends on the current interest rate being provided. if
Upto 9 4% concession on
current interest rate is 9 % than the applicant has to pay (9-4)
Lakhs current interest rate
= 5% interest
Upto 12 3% concession on This depends on the current interest rate being provided. if
 Loan
Interest Rate Notes
Amount
current interest rate is 9 % than the applicant has to pay (9-3)
Lakhs current interest rate
= 6% interest

Other conditions regarding Awas Yojana Loan

The tenure of the home loan shall be maximum of 15 years

In the above table you can see that the concession in the interest rate is given for loan
upto 12 Lakh. You might be wondering what will happen if the loan amount exceeds 12
Lakh. In that case, subsidized interest rate will be valid for 12 Lakh and for the remaining
amount no concession will be given

Once the applicant is allotted a home under Awas yojana, he will have the freedom to choose
subsidized loan through any participating bank. These banks could be Scheduled commercial
banks, Regional Rural Banks, Housing finance companies, State Cooperative banks or any other
approved institutions.

Subsidy Under Pradhan Mantri Awas Yojana

Under this scheme, the subsidy amount will be credited upfront to the beneficiary loan account.
This will result in reduced EMI. Any one can calculate the subsidy using this great tool