The Pradhan Mantri Awas Yojana (PMAY) scheme—often referred to as PM Awas Yojana—provides financial support to first-time homebuyers. The credit-linked subsidy scheme (CLSS) under the PMAY offers a subsidy on your home loan interest rate. The scheme was unveiled in 2015 with the vision of ‘Housing for all by 2022’.

At the outset, it aimed to help people in the economically weaker section (EWS) and lower income group (LIG) categories. But later the government decided to extend its wings. Now it also covers the middle-income group (MIG). Most banks and non-banking financial companies (NBFCs) allow you to take advantage of this subsidy scheme.

How the PM Awas Yojana can benefit you

The PM Awas Yojana reduces the cost of a home loan by Rs.1 lakh to Rs.2.3 lakh. Who can gain from this scheme? Anyone whose yearly income does not exceed Rs.18 lakh is eligible.

The EWS and LIG categories comprise people whose annual household incomes are up to Rs.3 lakh and between Rs.3 lakh and Rs.6 lakh, respectively.

The MIG is divided into two categories:

● MIG-I consists of people whose household income ranges from Rs.6 lakh to Rs.12 lakh per year.

● MIG-II includes people whose annual household income is between Rs.12 lakh and Rs.18 lakh.

Those in the EWS and LIG categories get an interest rate subsidy of 6.5% on their home loan. This is applicable for tenors of up to 20 years. People falling under MIG-I and MIG-II can get subsidies of 3% and 4%, respectively.

The subsidy applies to loans of up to Rs.6 lakh for the EWS and LIG categories. The borrower has to pay the standard, non-subsidised rate for loan amounts exceeding this. Similarly, the maximum loan cap for the MIG-I category is Rs.9 lakh. For the MIG-II category, it is Rs.12 lakh.

The subsidy applies to your current home loan interest rate. The subsidy amount is credited to your account by your lender. So, before you choose a home loan, it would help to use a home loan EMI calculator. Compare the interest rates and EMI’s offered by different lenders.

Eligibility Criteria

Pradhanmantri Awas Yojana (PMAY) scheme
Pradhanmantri Awas Yojana (PMAY) scheme

The PMAY scheme is an attractive option for families that meet the income eligibility criteria. Here, a family unit consists of a husband, a wife, and unmarried children. Married couples have the option to take joint ownership of the property. Alternatively, the house can be in the name of either spouse.

There are certain Pradhan Mantri Awas Yojana eligibility criteria to consider here. Individuals who already own a pucca house will not be eligible for this scheme. In other words, none of the family members should be owning a pucca house in any part of India.

The central and state governments offer housing assistance under several schemes. But to be eligible for the PMAY subsidy, the beneficiary family should not have benefitted from any other such scheme.

It is also mandatory for family members to have Aadhaar cards. Their Aadhaar numbers will be necessary at the time of application.

Mode of application

The application can be made both online and offline.

● For online application: You will need to visit the PMAY official website. Click on ’Citizen Assessment’. Now select the relevant category in the dropdown menu. On the pop-up window that appears, key in your Aadhaar number. Next, you will have to fill up the application form and submit it. Save the application number for tracking purposes.

● For offline application: Visit the nearest Customer Service Centre. Pay the registration fee and fill up the application form. Upon submission, you will receive the application number. Use this to track the status of your application.


The PMAY scheme is helpful for reducing home loan costs. As you set out on your journey to buy your first home, check if you are eligible for this scheme. Even a small subsidy can lead to big savings on your home loan.