In a bid to provide a home to every Indian by 2022, the Pradhan Mantri Awas Yojana (PMAY) housing for all scheme was launched by the Government in 2015. This has made affordable housing/ finance the most sought-after business.

Today every discussion on housing starts and ends with affordable housing. In 2015, with a vision to provide a home to every Indian, the Government launched “Housing for All by 2022” scheme. This Centre’s initiative brought the focus of government authorities, builders, regulators and bank/Housing Finance Companies (HFCs) to affordable housing. About 95 percent of the housing shortage in India is in the low-income segment which comprises the EWS (Economically Weaker Section) having annual income up to Rs 3 lakhs and LIG (Low Income Group) having an annual income of Rs 3-6 lakhs. The housing for all primarily focuses on the EWS and LIG segments. This scheme also covers people having an annual income between Rs 6 lakhs to Rs 18 lakhs which fall under the Middle Income Group (MIG -1 and MIG-2) scheme. Affordable housing is defined differently by different people. Some define it on the basis of the size of the loan or carpet area of house or affordability.

Credit-linked subsidy is provided to Economically Weaker Section (EWS), Low Income Group (LIG), and Middle Income Group (MIG-1 and MIG-2) beneficiaries. Under this scheme, eligible urban households get subsidy up to a maximum of Rs 2.67 lakhs on home loans availed from Banks/ HFCs (Housing Finance Companies) etc.

National Housing Bank has issued around 35 new licenses in the last three years to start Housing Finance companies (HFCs). Most of these new HFCs are focusing on funding affordable housing customers in the informal sector. This has led to the easy availability of housing finance to the EWS/LIG segment of customers. All these above factors have led to spurt in the demand and supply of affordable housing.

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