Is Pradhan Mantri Awas Yojana available to existing home loan borrowers?

Is Pradhan Mantri Awas Yojana available to existing home loan borrowers

There have been several queries from prospective homebuyers regarding the PMAY (Pradhan Mantri Awas Yojana) scheme and its eligibility. Many have enquired whether the PMAY eligibility extends towards existing home loan borrowers or not. To clarify this matter first, it should be stated that existing home loan borrowers will not be eligible for getting the benefits of the scheme.

This home loan scheme has been unveiled for those individuals or families who wish to purchase homes for the very first time. The biggest criteria for availing of the subsidy and getting on the PMAY list is that the homeowner should not have any pucca house registered in his/her name or any person in the family should not have any pucca house registered in his/her name in any part of the country.

Existing home loan borrowers already have a registered property to their names and hence they will not be eligible for getting PMAY subsidies and benefits. The application will possibly be rejected in this scenario.

For a married couple who are living on rent, they will be taken as a separate household if their parents have homes registered in their names. Yet, the couple will be eligible for a single house under PMAY, either bought individually by any of the spouses or purchased jointly. Whenever you have any doubts, pay a visit to your nearest bank branch for learning more about the scheme.

Learning more about the Pradhan Mantri Awas Yojana

If you want to know how to apply for PMAY, the procedure is quite simple. You just have to follow these steps:

1. Visit the official site at
2. Key in the Aadhar number and after the same is verified, the application will move to the next page.
3. All your personal information/details and data should be given regarding the state you are living in, the head of your family, present residential address and other vital details.
4. You can apply under the specific categories, i.e. EWS (Economically Weaker Sections), LIG (Lower Income Groups), MIG (Middle Income Groups) for PMAY as per the Housing for All by 2022

The key thing to remember is that the annual income limit for EWS will be Rs. 3 lakh while this will be anywhere between Rs. 3-6 lakh for LIG and between Rs. 6-18 lakh for MIG. The CLSS aspect may be availed by applicants under the LIG and MIG categories. EWS will be available under all verticals. CLSS for MIG I and MIG II is available and the scheme has been extended till March 2021. MIG-I will have households with annual income between Rs. 6-12 lakh while MIG-II will have households with annual income between Rs. 12-18 lakh.

Interest subsidy stands at 4% and 3% for MIG-I and MIG-II categories respectively and carpet area of housing units stands at 160 and 200 square meters respectively. The NPV subsidy amount thus stands at Rs. 2.35 lakh and Rs. 2.30 lakh respectively in these cases.

Adult earning members irrespective of marital status may be taken as separate households in case they do not own any pucca home in their names in any part of the country. This means that married or unmarried children who are staying with their parents in a house owned by their parents or on rent anywhere else, can choose to buy homes under the PMAY scheme.

Some other vital information to be kept in mind

The amount in interest subsidy is not the differential of the amount of interest, i.e. of the actual and subsidized rate. Instead, it is the NPV or net present value pertaining to the amount of interest subsidy and is calculated at 9% as a discount. For the working out of NPV for the subsidy, the amortization schedule of the loan will be required since the interest component of every EMI (equated monthly installment) has to be taken into account. With the PMAY subsidy, the amount of the loan comes down, lowering the overall interest payable as well.

The PMAY benefit can be directly availed if you are buying a new home from the builder/real estate developer or even buying a home in the secondary/resale market. You can also take a loan for constructing your home. If an individual owning a home wishes to get benefits under PMAY (Pradhan Mantri Awas Yojana), there is only one possibility at hand.

The Government has stated that under the Housing for All by 2022 mission, there is a provision for incremental housing or enhancements to the existing pucca home under the CLSS aspect of the scheme.

A financial institution may consider applicants looking for home loans for adding a room or kitchen to their existing households on the ground where their existing pucca home stands. PMAY linked home loans are offered by all major lenders including SCBs (scheduled commercial banks), regional rural banks (RRBs), housing finance companies, urban cooperative banks, state cooperative banks, non-banking financial companies or NBFCs and small finance banks among others. There are zero processing charges for eligible amounts under these home loans. Processing fees are payable beyond eligible loan amounts in case of interest subsidies.

The Pradhan Mantri Awas Yojana and the mission of Housing for All by 2022 has been a major game-changer for citizens who were unable to own homes earlier. Affordable housing has been given major emphasis by the Central Government, right from the Union Budget of 2017 onwards.

The scheme is hugely beneficial for first-time homebuyers, particularly when the subsidy is taken into account. A lower home loan burden makes it more affordable for people across various categories to own homes without major hassles. Coming back to the initial question, you cannot be eligible for homeownership under the PMAY scheme if you are already an existing home loan borrower. This automatically means that you have a pucca home registered in your name, i.e. for which you have taken the loan.

However, if it is a home that you have constructed, then, as mentioned earlier, you can apply for a home loan under the CLSS component of the scheme. This will help you apply for the addition of a new room or kitchen to your existing pucca house.

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