The Ministry of Housing and Urban Affairs (HUA) on Friday announced that the benefit of interest subsidy of about Rs 2.60 lakh on home loans under the Pradhan Mantri Awas Yojana (Urban) will now be available for beneficiaries belonging to the Middle Income Groups (MIG) for 15 more months beyond December this year till March 2019.
The Ministry wants middle class people to get benefit from the Government's scheme under PMAY (urban). The HUA Ministry is a worried lot as private sectors have not shown any interest in the PMAY (urban). The Ministry is thus announcing sops to encourage them to invest in affordable housing sector.
Prime Minister Narendra Modi, in his new-year eve speech last year, had announced the Credit linked Subsidy Scheme (ClSS) under PMAY(Urban) to MIG, till the end of December this year. Under the scheme, MIG beneficiaries with annual income of above Rs 6 lakhs and up to Rs 12 lakhs would get an interest subsidy of 4% on a 20 year loan component of Rs 9 lakhs. Those with annual income exceeding Rs 12.00 lakhs and up to Rs 18 lakhs would get interest subsidy of 3 percent.
The total interest subsidy to be paid to MIG people on Rs 9 lakh loan comes to Rs 2.35 lakh and on a loan of Rs 12 lakh, it comes to Rs 2.30 lakh per beneficiary,” the guidelines said. Reiterating the Government's commitment to meet the Housing for All targets in urban areas by 2022, HUA Ministry has urged private investors to invest in affordable housing, being promoted by the Government in a big way with several incentives and concessions.
In the guidelines for ClSS (MIG), the tenure of loan has been stipulated to be 20 years or that preferred by the beneficiary, whichever is lower. The total interest subsidy accruing on these loan amounts will be paid to the beneficiaries up front in one go there by reducing the burden of Equated Monthly Installment (EMI).
According to the Ministry, 70 lending institutions including 45 Housing Finance Companies, 15 scheduled banks, two Regional Rural Banks, one Cooperative Bank, four Small Finance Banks and three Non-Banking Finance Companies - Micro Finance Institutions have signed Memoranda of Understanding with National Housing Bank (NHB) for implementation of ClSS (MIG) component of PMAY (Urban).