Pradhan Mantri Awas Yojana (PMAY)
Pradhan Mantri Awas Yojana (PMAY) is a Government of India housing subsidy scheme launched in 2015 with the objective of providing affordable housing to economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG), primarily through the Credit Linked Subsidy Scheme (CLSS) on home loan interest.
PMAY was launched in June 2015 under two verticals: PMAY-Urban (for urban areas, administered by the Ministry of Housing and Urban Affairs) and PMAY-Gramin (for rural areas, administered by the Ministry of Rural Development). The urban component has four implementation models: Beneficiary-led Construction (BLC), Affordable Housing in Partnership (AHP), In-Situ Slum Redevelopment (ISSR), and the Credit Linked Subsidy Scheme (CLSS), which is most relevant to individual home loan borrowers.
Under CLSS, eligible beneficiaries receive an upfront subsidy credited to their home loan account, reducing the principal outstanding and therefore the EMI. The subsidy parameters as originally structured were: EWS (income up to Rs 3 lakh per annum) and LIG (Rs 3–6 lakh) received a 6.5% interest subsidy on loans up to Rs 6 lakh for a tenure of 20 years, translating to a present value subsidy of approximately Rs 2.67 lakh. MIG-I (Rs 6–12 lakh income) received 4% subsidy on loans up to Rs 9 lakh, and MIG-II (Rs 12–18 lakh) received 3% on loans up to Rs 12 lakh.
The CLSS subsidy was disbursed by the National Housing Bank (NHB) and HUDCO to participating primary lending institutions (PLIs) — scheduled commercial banks and housing finance companies — and credited to the borrower's loan account by way of principal reduction. The subsidy amount was not taxable in the hands of the borrower. PMAY-CLSS for MIG categories was discontinued from March 31, 2021. The EWS and LIG components under PMAY-Urban 2.0, launched in August 2024, continue with modified subsidy structures.
Eligibility conditions included: the beneficiary family (husband, wife, and unmarried children) should not own a pucca house anywhere in India; the property should be in the beneficiary's name (or co-applicant who is a woman for new construction or first-time purchase); the loan should be from a PLI; and the carpet area of the dwelling should not exceed prescribed limits (60 sq mt for EWS/LIG, 160 sq mt for MIG-I, 200 sq mt for MIG-II). Aadhaar linkage is mandatory for beneficiary identification.