Under PMAY, now even millennials can apply for home loans

As per the amended PMAY guidelines, in case of a married couple, either of the spouses or both in joint ownership will be eligible for a single house, subject to income eligibility of the household under the scheme as per the amended guidelines.

In his New Year’s eve address, Prime Minister Narendra Modi had announced the PMAY (urban) for middle income group. Under the scheme, the Central government offers an interest subsidy of 4 percent for loans up to Rs 9 lakh for those earning a household income of up to Rs 12 lakh. An interest subsidy of 3 percent is offered for loans up to Rs 12 lakh for families with a household income of Rs 18 lakh. The benefits are anything in the range of Rs 2 lakh to Rs 2.5 lakh. The government has so far disbursed Rs 750 crore to over 40,000 buyers under this scheme.

Millennials Keen on Homes

According to a survey on The Millennials by CBRE Group Inc across 13 countries, as many as 82 percent Indian millennials live with their parents and saving for the future is among their top priorities and a large majority look at real estate as a sound investment opportunity. It points out that by 2020, 65 percent of Indian population will be under the age of 35.

Over 23 percent of Indian millennials currently residing with their parents are likely to move out of their family homes within the next two to five years. As many as 65 percent of them aspire to buy a property in the future without compromising on the quality of life, the report says.

Also, compared to other countries, millennials in India and China displayed the strongest intentions to purchase their own property in the near future with as many as 35 percent Indian millennials citing investment as the key driver to buy a house, the report says.

Definition of Carpet Area Amended

The definition of carpet area has also been amended to include only the internal walls of an apartment and exclude the area of the balconies, terrace or verandahs. Carpet area has now been defined as “the net usable floor area of an apartment, excluding the area covered by the external walls, area under service shafts, exclusive balcony or verandah area and exclusive open terrace area but includes the area covered by the internal partition walls of an apartment,” as per the Mission guidelines.

The guidelines earlier defined carpet area as an area enclosed within the walls, actual area to lay the carpet. The area did not include the thickness of the inner walls.

Areas notified by development authorities now eligible for PMAY benefits
As per the amendment, areas notified by the development authorities will now be eligible for benefits under PMAY. What this means is that first time homebuyers of areas such as Noida and Greater Noida, Lucknow etc can now benefit under this scheme.

“In this Mission, states and Union territories will have the flexibility to include planning areas (to the exclusion of rural areas) as notified with respect to statutory towns and such planning areas (to the exclusion of rural areas) as notified by the development authorities,” as per the amended guidelines.

In the existing guidelines, a homebuyer cannot avail of the interest subsidy under PMAY for the purchase of a house in an area notified by the development authorities. Only statutory towns under Census 2011 and towns notified by the state government are eligible for coverage under PMAY.