What the scheme is
Pradhan Mantri Awas Yojana-Urban 2.0 (PMAY-U 2.0) is the central government’s housing scheme for towns and cities, run by the Ministry of Housing and Urban Affairs for five years from 1 September 2024. It has four parts: Beneficiary Led Construction (BLC), Affordable Housing in Partnership (AHP), Affordable Rental Housing (ARH) and the Interest Subsidy Scheme (ISS). This guide covers the interest subsidy, the part most buyers ask about. Villages have a separate scheme, PMAY-Gramin.
Who qualifies
- Family: husband, wife, and unmarried sons and daughters.
- No pucca house: no one in the family may own a pucca (all-weather) house anywhere in India.
- Income: up to ₹9 lakh a year for the household, in three groups: EWS up to ₹3 lakh, LIG up to ₹6 lakh and MIG up to ₹9 lakh.
The subsidy
| Condition | Limit |
|---|---|
| Loan | Up to ₹25 lakh, for more than five years |
| House value | Up to ₹35 lakh |
| Carpet area | Up to 120 square metres |
| Subsidy | 4% a year on the first ₹8 lakh of the loan, for up to 12 years |
| Most you can get | ₹1.80 lakh, in five yearly instalments |
| Loans covered | Sanctioned and disbursed on or after 1 September 2024, to buy, re-buy or build a house |
The lender credits each instalment to your loan account, reducing what you owe, as long as the loan is running and more than half of the principal is still outstanding.
If you are buying a plot
The subsidy is for a house: buying one, re-buying one or building one. A loan to buy only a plot is not for a house, so do not count on the subsidy for it. A loan to build a house on your plot may qualify if you meet the other conditions; ask your lender.
How to apply
- Register your demand on the PMAY-U 2.0 unified web portal, with Aadhaar details for your family.
- Choose the bank or housing finance company that will give the loan. The portal sends your application to it.
- Give the lender a self-certificate or affidavit of your household income, and the papers it asks for.
- The lender checks that you qualify and claims the subsidy for you through the scheme’s central nodal agency.
Building on your own land
Families in the EWS group who own land in a town or city can apply for help to build a new house under the Beneficiary Led Construction part of the scheme. In Karnataka the central government gives ₹1.5 lakh and the state at least ₹1 lakh for each house.
Check before you rely on it
The scheme’s rules can change during its five years. Check the current conditions on the portal and with your lender before you count the subsidy in your budget.
Sources
Official sources are marked. Where no official page could be read, we used news reports and law firms’ notes.
- PMAY-U 2.0 operational guidelines (opens in a new tab) · Ministry of Housing and Urban Affairs · Sep 2024Official
- PMAY-U 2.0 unified web portal (opens in a new tab) · Ministry of Housing and Urban AffairsOfficial