Affordable Housing Schemes: The Way to Own Your Dream Home

One of the pillars of the global economy today, India has emerged as one of the fastest-progressing economies in recent years. Strong fiscal growth, progressing middle class, increasing disposable income, and rapid urbanization have not just fueled a consumerism economy but have also resulted in increased housing demand.Unfortunately, quick urbanization has also caused a severe urban and semi-urban housing shortage for the middle-class and lower-income population. With nearly 69% of India’s population looking forward to buying homes, the housing shortage has proved to be a major deterrent in India’s effort to improve its living conditions.To overcome this shortage, the government has come up with different dedicated affordable housing schemes and policies such as the Pradhan Mantri Awas Yojana to provide homes for its citizenry by 2022. Through these affordable housing schemes, the government aims to provide Credit Linked Subsidy Scheme (CLSS), which is likely to subsidize the interest burden for the borrowers.

1. You can opt for the loan as a first-time home buyer and end-user. However, you should reside in any of the statutory towns or adjacent planning areas as directed in the 2011 census report.
2. You or any other member of your family must not own a pucca house within India’s borders.
3. You will be considered ineligible if you or your immediate family (husband, wife, unmarried sons and/or daughters) have ever availed assistance from any government body (state or central) under a housing scheme.

• Middle-Income Group or MIG I (Annual income between ₹6-12 lakh):  Interest subsidy of 4%
• MIG II (Annual income between ₹12-18 lakh): Interest subsidy of 3%
• Economically Weaker Section or EWS (Annual income between ₹0-3 lakh): Interest subsidy of 6.5%.
• Lower Income Group or LIG (Annual income between ₹3-6): Interest subsidy of 6.5%.

1. You can claim interest subsidies if you fall into any of the following groups:
2. You get an extension of loan repayment tenure up to 20 years and an additional top-up loan but at non-subsidized rates.
3. There is no minimum capping for the loan amount or cost of the property.

If you belong to the LIG and have applied for a loan worth ₹6 lakh for 20 years at 9% interest, you can avail a maximum interest subvention worth ₹2.67 lakh.

Under the scheme, the interest subsidy would be automatically credited to your loan account. You do not need to apply separately.

1. Inadequate low-cost funding
2. Scarcity of suitable low-cost land within urban and semi-urban regions
3. Statutory bureaucracy
4. Limited or lack of public-private partnership
5. Insufficient capability in terms of implementing agency
6. Lack of proper documentation

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.