Buying your first home can be exciting but also a bit confusing. To help you out, the Indian government has special schemes just for first-time home buyers. These schemes offer financial help and other benefits to make buying a home easier and more affordable. From discounts on loan interest rates to tax savings, these programs are designed to support you in your home-buying journey. In this article, we’ll look at the best government schemes for first-time home buyers in India and how they can help you get your new home.
See also: A guide to first time home buying in 2024
Pradhan Mantri Awas Yojana (PMAY)
Eligibility
PMAY is available for three income groups:
- Economically Weaker Section (EWS): Families with an annual income up to ₹3 lakh.
- Low-Income Group (LIG): Families with an annual income between ₹3 lakh and ₹6 lakh.
- Middle-Income Group (MIG): Families with an annual income between ₹6 lakh and ₹18 lakh, divided into: MIG I: ₹6 lakh – ₹12 lakh and MIG II: ₹12 lakh – ₹18 lakh
Benefits
Interest subsidy
- EWS: Up to ₹2.67 lakh off a ₹6.5 lakh loan.
- LIG: Up to ₹2.35 lakh off a ₹9 lakh loan.
- MIG I: Up to ₹2.35 lakh off a ₹12 lakh loan.
- MIG II: Up to ₹1.65 lakh off a ₹12 lakh loan.
This subsidy is given directly to the beneficiary’s bank account linked to their home loan.
Tax benefits
- Section 80C: Up to ₹1.5 lakh off on the principal repayment of the home loan.
- Section 24: Up to ₹2 lakh off on the interest repayment of the home loan.
- Section 80EE: Extra ₹50,000 off on interest for first-time buyers in MIG I.
- Section 80EEA: Extra ₹50,000 off on interest for first-time buyers in EWS/LIG.
Credit-Linked Subsidy Scheme (CLSS)
The Credit-Linked Subsidy Scheme (CLSS) is part of the Pradhan Mantri Awas Yojana (PMAY) and aims to make housing more affordable.
Under CLSS, people in the Low-Income Group (LIG) and Middle-Income Group (MIG) can get a discount on their home loan interest rates.
Eligibility
- You must be in the LIG or MIG income groups.
- You shouldn’t own any other house in your name or your family’s name.
- You must not have received any government housing subsidy before.
Benefits of CLSS
Interest rate discount
LIG: Those in the LIG group get a 6.5% discount on interest for loans up to ₹6 lakh.
MIG: People in the MIG group get:
- 4% discount on interest for loans up to ₹9 lakh in MIG I.
- 3% discount on interest for loans up to ₹12 lakh in MIG II.
Lower monthly payments: The discount on interest rates reduces the monthly loan payments, making them easier to manage.
Loan duration: The subsidy can be used for up to 20 years or the actual loan period, whichever is shorter.
Read also: Benefits for first-time homebuyers
State specific schemes
The real estate landscape in India continues to evolve, with various housing schemes and initiatives being implemented across different states.
Delhi Development Authority (DDA) Housing Scheme
- Open to Indian adults in EWS, LIG, MIG, or HIG categories.
- Linked with PMAY for interest rate discounts.
Tamil Nadu Housing Board Scheme
- Interest rate IS 6.50% for a 20-year loan term.
- Includes reservations based on caste, occupation, and disability.
Ahmedabad Urban Development Authority (AUDA) New Housing Scheme
- Works with PMAY to provide housing in Ahmedabad.
- PMAY and AUDA work together to offer affordable options.
MHADA (Maharashtra Housing and Area Development Authority) Scheme
- Homes are allocated through a lottery for fairness.
- Open to Maharashtra residents from LIG, MIG, or HIG with a domicile certificate.
- MHADA offers loans to help with home purchases.
FAQs
Yes, the Pradhan Mantri Gramin Awaas Yojana (PMGAY) provides financial assistance for constructing and upgrading housing units in rural areas.
Some states offer schemes specifically for women, such as the Pradhan Mantri Awas Yojana - Urban (PMAY-U) for women beneficiaries.
It depends on the specific schemes and their eligibility criteria. Some schemes may allow stacking of benefits, while others may have restrictions. Are there any schemes specifically for rural home buyers?
Are there any schemes for women?
Can I avail of multiple schemes simultaneously?
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |