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Housing finance is the most popular funding option to finance dream homes. People borrowing Home Loans can obtain subsidies on their interest and principal amounts under various Indian government housing schemes. They make home ownership easier for the lower-middle class of Indian communities. Apart from the PMAY scheme, you can now obtain subsidies under the 9 lakh Home Loan subsidy scheme. Let’s look at the scheme benefits and other information you must know.
Home Loan Subsidy
On August 15, 2023, Prime Minister Narendra Modi announced a new government housing scheme to provide subsidised loans for small urban homes in the next five years. The $7.2 billion subsidy scheme aims to offer an annual interest subsidy of 3 to 6.5% (Rs. 9 lakh) on home loans. Home Loans less than Rs 50 lakh for a 20-year term will qualify for a Home Loan subsidy under this scheme. So, are you planning to take out a home loan to purchase your dream house? Take advantage of this 9 lakh Home Loan subsidy to bring the cost to your budget.
Advantages of Central Government Home Loan Subsidy Schemes in 2023
The Indian government runs several Modi Home Loan schemes, making home purchasing easier. Most government housing initiatives target lower to middle-class people, aiming to help every family own at least one residential property. Various advantages of Indian government housing schemes include the following:
Central Government’s Home Loan Schemes: Home Loan Subsidy up to Rs. 9 Lakh
Earlier, the Indian government launched the Pradhan Mantri Awas Yojana (PMAY) in 2015 to make affordable housing accessible to all citizens by 2022. Through this credit-linked subsidy scheme (CLSS), the government provided its beneficiaries with an interest subsidy to avail loans to purchase or build a house. Offering benefits to EWS, LIG, MIG 1, and MIG 2 groups of Indian societies, the urban scheme sanctioned more than 1.21 crore houses under the project by May 2022. Any beneficiary eligible for a Home Loan subsidy under this scheme can get up to Rs 2.67 Lakh.
Recently, the Prime Minister announced the subsidy scheme to benefit aspiring Home Loan borrowers further. Under this scheme, the central government will spend Rs.720 crore on subsidised loans to small urban home buyers in the next five years.
Check the home loan interest subsidy eligibility criteria and see which Modi government Home Loan scheme you qualify for. Obtain a Modi Home Loan under any of these schemes to make your home purchase more affordable.
Central Government Housing Scheme Announcement for Middle-Class
The Indian government is set to launch the new government housing scheme by 2023. The Prime Minister had announced it in his Independence Day speech while addressing the nation. It is primarily meant for middle-class urban people who want to buy houses but live on rent in slums or chawls. Although the authorities are still finalising the modalities, it is expected to be an extension of PMAY with increased eligibility for interest subsidy.
The scheme is proposed till 2028, when the beneficiary will receive the interest subsidy into their housing loan account upfront. According to estimates, the project will benefit around 2.5 million low-income loan applicants in urban areas.
Also Read- Features and Benefits of Pradhan Mantri Awas Yojana (PMAY)
New Govt Home Loan Scheme for City Developers
On October 3, 2023, the Finance Ministry approved the Rs 60000 crore new Home Loan subsidy scheme to support government housing initiatives. The Expenditure Finance Committee, the Finance Ministry’s key arm, has given the green light to the Housing Ministry's scheme proposal, indicating a giant stride in supporting affordable homes in urban areas of the country. Apart from benefitting the Home Loan borrowers, the scheme also benefits city developers. The project will increase the demand for their units, giving them an opportunity to expand their business. With easier approvals from the government authorities, they can build more projects and develop cities better.
How to Apply for Home Loan Subsidy Under Union Government Schemes?
Although the steps to apply for a Home Loan subsidy under the new home loan scheme have still not been announced, the steps to apply for it under the PMAY scheme are as follows:
Also Read- Find out How PMAY Government Scheme is the Smartest Investment Option
FAQs about Home Loan Subsidy Schemes 2023
1. When will the new PMAY Loan Scheme Start?
The new Government housing finance scheme is expected to start around the last quarter of 2023.
2. How have Modi's home loan schemes impacted the Indian housing market?
The Indian government housing schemes have significantly impacted the Indian housing market. They have made homes more affordable for the lower-middle-class people of India, increasing the demand and competition in the industry.
3. What are some upcoming trends in government housing finance and subsidies in India?
The government housing finance market is expected to expand at a CAGR (Compound Annual Growth Rate) of 20.58% during FY 2022-2027. The demand for affordable homes is expected to grow, increasing the homeownership rate in India.
4. What is the role of financial institutions and banks in facilitating government-backed home loans?
Banks and financial institutions play a great role in facilitating Modi Home Loan schemes. With increasing competition in the lending market, lenders make Home Loans at competitive interest rates. Moreover, borrowers can benefit from the Modi Home Loan schemes, increasing their affordability to become homeowners.
5. Can NRIs (Non-Residential Indians) avail of these housing subsidies and schemes?
Indian government housing schemes provide incentives and subsidies to Home Loan borrowers and city developers. NRIs can also leverage these subsidies and tax benefits by investing in affordable projects.
Read also: भूमि ऑनलाइन कर्नाटक
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