PMAY-U 2.0: How to get up to Rs 1.80 lakh Subsidy on your home loan

The Pradhan Mantri Awas Yojana – Urban 2.0 was introduced by the central government a few months ago. The PMAY-U 2.0 offers affordable housing under the vision of “Housing for All”. Moreover, beneficiaries can get 4 per cent out of a home loan to buy, build, or buy a resale property under the scheme. However, it is applicable after September 1, 2024. The scheme will be valid for the next five years.

The central government introduced the PMAY-U 2.0 with an aim to make housing more accessible and affordable for Economically Weaker Sections (EWS), Lower Income Groups (LIG) and Middle Income Groups (MIG).

Benefits of PMAY-U 2.0

Under this scheme, beneficiaries can get a 4 per cent interest subsidy on loans up to Rs 8 lakh for houses costing Rs 35 lakh or below. The assistance is valid for a loan period of up to 12 years. The beneficiaries will also receive a financial assistance of Rs 1.80 lakh distributed in five annual installments.

Eligibility for the home loan subsidy?

As mentioned above the Economically Weaker Sections (EWS), Lower Income Groups (LIG) and Middle Income Groups (MIG) people are eligible to apply for the scheme.

However, they need to fulfill some conditions such as the beneficiaries must meet the following income criteria:

• EWS: Annual income up to Rs 3 lakh
• LIG: Annual income up to Rs 6 lakh
• MIG: Annual income up to Rs 9 lakh

To qualify for this grant, applicants must provide proof of income. EWS families with annual income up to Rs 3 lakh can also get financial assistance of up to Rs 2.5 lakh to build a new house on their existing land.

However, those who have received a house in a rural or urban area under any government housing scheme in the last 20 years are not eligible to apply for the scheme. In addition, businesses or households approved under the original PMAY-U but subsequently canceled after December 31, 2023, will not be included in PMAY-U 2.0.

Four components of the scheme

PMAY-U 2.0 is implemented under four verticals:

1. Beneficiary-led Construction (BLC): For individuals constructing new homes.
2. Affordable Housing in Partnership (AHP): For EWS beneficiaries buying houses of 30-45 square meters, built by public or private agencies.
3. Affordable Rental Housing Complexes (ARHCs): For migrants and workers.
4. Credit-Linked Subsidy Scheme (CLSS): Offering interest subsidies on home loans.

Things to note: 

• EWS beneficiaries can receive Rs 2.5 lakh financial support for purchasing homes under AHP.
• Houses under AHP will be constructed with a carpet area of 30-45 square meters and provided at affordable rates.

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