Yet another flagship scheme of the UPA, the Rajiv Rinn Yojna (RRY) — which has failed to take off since its launch in 2013 — is all set to be replaced with HOMES (Home Owners’ Mortgage Equity Subvention Scheme (HOMES), a part of the Narendra Modi Government’s plans to ensure housing to all by 2022.

RRY is one of the UPA’s major schemes that the Modi Government has decided to do away or tweak them with better features to attract maximum beneficiaries. The convergence of Nirmal Bharat Abhiyan (NBA) with MNREGA has already been done away with.

Unlike RRY, the HOMES aims to be more result-oriented with higher interest subsidy from 5 per  cent to 5.5 per cent on loans granted to construct houses or extend the existing ones while minimum dwelling size has been proposed to be increased from 21 sq meters to 27 sq meters for the urban poor from Economically Weaker Section (EWS) and low Income Group (lIG).

The officials in the Housing and Urban Poverty Alleviation (HUPA) Ministry said under the scheme, which will be launched soon, the entire interest amount can be paid upfront as down payment. “This is aimed at bringing down the EMI amount. If interest is paid upfront from the subsidy amount, the monthly installment will reduce significantly,” they said.

The interest subvention has been proposed considering the fact that poor and needy may not be able to service the EMI when the interest rate is high.

The income slab has been increased for eligible categories which include women, widows, SC/STs, persons with disabilities and transgenders; from the existing Rs one lakh for EWS, the income group will now be extended to Rs 2 lakh and for the lIG category it will be up by a lakh to Rs 3 lakh per annum.

loan amount has been enhanced for the EWS category from the existing Rs 5 lakh to Rs 10 lakh and for the lIG category from Rs 8 lakh to Rs 15 lakh for a period of 20 years. Housing and Urban Development Corporation and National Housing Bank have been designated as the Central Nodal Agencies for the Scheme.

A major attraction in the HOMES will be that it would allow the beneficiaries to self attest the income certificate. Under the RRY, the applicants had to seek a certification from Government officials who many times were reluctant to do so. Not a single application was received from the urban poor under the RRY.

Housing shortage is estimated to be 18.78 million (2012) of which close to 96% pertains to EWS/lIG. The officials pointed out that with business as usual, this will reach 30 million by 2022, the year in which India will celebrate its 75th Anniversary of Independence.

One million beneficiaries were targeted to be covered under the RRY during the 12th Plan period 2012-17, involving a total outlay of Rs 3,580 crore.