The Pradhan Mantri Awas Yojna (Urban) (PMAY-U) scheme has been significantly revised to expand its reach and inclusivity.
As reported by the Money Control, the government has lowered the eligibility threshold for the Interest Subsidy Scheme (ISS), which is designed to make housing more affordable for a broader segment of urban households.
Urban households with an annual income of up to Rs 9 lakh will now qualify for interest subsidies on home loans under the updated PMAY-U scheme. This is a significant decrease from the previous limit of Rs 18 lakh.
The maximum allowable property size for receiving the interest subsidy has been reduced from 200 square meters to 120 square meters. Additionally, the maximum interest subsidy has been lowered from Rs 2.3 lakh to Rs 1.8 lakh. The updated scheme introduces new incentives aimed at enhancing the availability of affordable rental housing in urban areas, particularly for migrant workers, students, and working women.
Entities that utilize new construction technologies for affordable rental housing will receive a subsidy of approximately Rs 1.5 lakh for constructing one-bedroom units measuring 30 square meters. The new units will feature single bedrooms up to 30 square meters, double bedrooms up to 60 square meters, and dormitory beds with carpet areas of up to 10 square meters each.
A new web-based interface will soon be launched to provide live details of available rental units and dormitories, allowing potential tenants to view and book accommodations online. Rental rates will be set by local authorities based on area surveys and can be revised every two years with a maximum increase of 8% annually and a cap of 20% over five years
To improve compliance and support, the government has revised the terms of the interest subsidy:
Beneficiaries taking loans up to Rs 25 lakh for properties costing up to Rs 35 lakh will be eligible for a 4% interest subsidy on the first Rs 8 lakh of the loan. The subsidy will be available for up to 12 years and disbursed in five-yearly installments.
Beneficiaries will be able to access their subsidy accounts through a dedicated website, OTP, or smart cards.The updated PMAY-U scheme, referred to as PMAY 2.0, incorporates several important components:
Households with an annual income of less than Rs 3 lakh, categorized as Economically Weaker Sections (EWS), can receive financial assistance of up to Rs 2.5 lakh for constructing a house on their own land or purchasing a flat. The previous In-Situ Slum Redevelopment (ISSR) component has been integrated into AHP, with increased assistance of Rs 2.5 lakh compared to the previous Rs 1 lakh.
The revisions to the PMAY (Urban) scheme aim to make housing more accessible and affordable for urban residents. By lowering income eligibility limits, reducing subsidy amounts, and introducing new provisions for affordable rental housing, the scheme seeks to support a broader range of beneficiaries and enhance transparency in the housing sector. These updates are expected to significantly impact home ownership and rental housing availability in urban areas.