Pradhan Mantri Awas Yojana - Urban (PMAY-U) Scheme

Pradhan Mantri Awas Yojana - Urban (PMAY-U) Scheme, a flagship programme was launched by The Honourable Prime Minister of India on June 25, 2015. The scheme aims to provide all-weather pucca¹ houses to eligible urban households, realising the vision of 'Housing for All'. As India's urban landscape expands, the demand for housing has grown exponentially. The need for affordable housing varies significantly across different income groups, including Economically Weaker Sections (EWS), Low-Income Groups (LIG) and Middle-Income Groups (MIG). To address this, the Government of India has introduced PMAY-U 2.0, which seeks to provide assistance to 1 crore eligible urban families over the next five years. PMAY-U 2.0 builds upon the learnings of its predecessor, incorporating global best practices and stakeholder feedback.

The scheme comprises of four key verticals out of which ICICI Bank is participating in only the Interest Subsidy Scheme (ISS) which includes subsidy on Home Loans for EWS, LIG and MIG families, helping people to achieve their dream of owning a home.

By providing affordable housing options, PMAY-U 2.0 aims to improve the quality of life for urban Indians, ensuring dignity and security for all.

Interest Subsidy Scheme (ISS)

The ISS is a Central Sector Scheme that aims to expand institutional credit flow to the affordable housing sector. Under this scheme, subsidies will be provided on Home Loans sanctioned and disbursed on or after September 1, 2024, to eligible beneficiaries of EWS, LIG and MIG for the purchase, re-purchase or construction of houses.

Eligibility Criteria:

Households belonging to EWS, LIG and MIG categories with an annual income of up to ₹3 lakh, ₹6 lakh and ₹9 lakh respectively.

Beneficiaries will be required to submit a self-attested certificate / affidavit as proof of income.

Subsidy Details:

A maximum interest subsidy of ₹1.80 lakh, with a maximum Net Present Value (NPV) of ₹1.50 lakh (at a discount rate of 8.5%), will be provided to eligible beneficiaries with a loan tenure of more than five years.

For households with income up to ₹9 lakh, a subsidy at 4% on the first ₹28 lakh for a tenure up to 12 years will be provided.

The carpet area of houses under this component should be up to 120 square meters.

Subsidy Disbursement:

The subsidy will be released to the beneficiaries in five equal yearly instalments.

Exclusion (Ineligibility) Criteria under ISS:

1. The subsidy under the scheme will be provided only once for a property. If it is sold to someone else, the purchaser can’t take benefit of ISS on this property. Primary Lending Institutions (PLIs) are to ensure that subsidy benefit is not taken by the previous owner by checking on the unified web portal, before initiating the claim of the current occupant

2. If two or more family members take combined or separate loan on same property, they will be treated as same the family for calculation of family income and benefit

3. In case a borrower has taken a Housing Loan from one PLI and later switches to another PLI for balance transfer, such beneficiary will not be eligible to claim the benefit of interest subsidy again. If a person has not claimed interest subsidy from the first PLI, he / she shall not be eligible after balance transfer

4. Only loan up to ₹25 lakh with the house value up to ₹35 lakh will be eligible for subsidy under this vertical. If the family income or property value as assessed by PLI for sanction of loan is higher than the eligibility limit, the loan will not be eligible for subsidy

5. In case of any false declaration on income level by a beneficiary who has already availed the scheme benefit, he / she would be liable for legal proceedings under applicable laws.

Procedure:

For availing the benefit under ISS vertical, eligible beneficiaries will be required to register their demand through unified web portal. Subsequently, the application will be forwarded to the concerned PLIs for further necessary action as per his / her eligibility criteria as per Annexure-7.

Based on the loan disbursed by a PLI to beneficiaries, the Ministry shall release subsidy through single click on a monthly basis through Central Nodal Agency to PLI using unified web portal. Beneficiary would be intimated by SMS on registered mobile number regarding the amount of subsidy credit, bearing beneficiary ID details.

The subsidy will be released in 5 yearly instalments through Direct Benefit Transfer in loan accounts of beneficiary provided the loan is active at the time of release of subsidy and more than 50% principal is outstanding. Subsidy will be credited by the PLI to the borrower’s account upfront by deducting it from the principal loan amount of the borrower. The borrower will pay the Equated Monthly Instalment as per lending rates on the remainder of the principal loan amount.

The subsidy will be provided to those beneficiaries who have submitted the approved layout plan to the PLIs as per guidelines of States / Union Territories (UTs). However, the layout plan may not be insisted by PLIs where States / UTs have provided the exemption for construction of houses having provision of deemed approval or pre-approved building plan.

 ¹A pucca house refers to a ‘solid’ or ‘permanent’ house that is built using cement, bricks, stones, etc.

²HH – Household.