The NDA (National Democratic Alliance) government has increased the carpet area of houses that were eligible for interest subsidy under the Credit Linked Subsidy Scheme (CLSS). This fortunate revision will be applicable to the Middle Income Group (MIG) under Pradhan Mantri Awas Yojana (PMAY).
The introduction of landmark Real Estate (Regulation and Development) Act, 2016 (RERA) is against the practice of super built up area and want to remove it. The affordable housing sector was given a shot in the arm by the government in its budget this year, as it gave it the status of infrastructure.
Six key things to know about the new rules announced under PMAY
1) For MIG I, the existing carpet area of 90 sq mt (968.752 sq ft) will be increased to 120 sq mt ( 1291.668 sq ft.) and instead of 110 sq mt (1184.03 sq ft) for MIG II category, it will now be 150 sq mt ( 1614.585 sq ft). The increase in carpet area will enable the MIG category of individuals to have a wider choice in developers’ projects. The increased carpet area will also give a boost to the sale of ready built flats in the affordable housing segment.
2) The decision, besides helping in clearing the unsold stock, would also encourage the developers to launch new projects, which in turn would boost the economy, GDP growth and employment opportunities. The move would now bring the entire demand for affordable housing under the interest subvention scheme.
3) The CLSS for MIG covers two income segments in the MIG, including Rs 6 lakh to Rs 12 lakh (MIG-I) and Rs 12 lakh to Rs 18 lakh (MIG-II) per annum.
4) In the MIG I, an interest subsidy of 4 per cent is allowed for loan amounts up to Rs 9 lakh while in the MIG II category an interest subsidy of 3 per cent is allowed for loan amount of Rs 12 lakh. Housing loans above Rs 9 lakh and Rs 12 lakh will be at non-subsidised rates.
5) One can avail PMAY linked loans from any primary lending institutions such as commercial banks, housing finance companies, Regional Rural Banks s), State Cooperative Banks, Urban Cooperative Banks, Small Finance Banks, Non Banking Financial Company and so on. There will not be any processing charge for eligible housing loan amount as per income criteria under the Scheme.
6) Realtors’ body CREDAI and NAREDCO hailed the government’s decision to hike carpet area of houses eligible for interest subsidy under the Pradhan Mantri Awas Yojana-Urban, saying the move would help middle income buyers and help the sector in clearing unsold homes.
