How government housing schemes help first-time home buyers in India?

Buying your own house tops the list of wants for mostly everyone. However, the real estate prices may be overwhelming. However, first time buyers need not worry- thanks to the many government schemes made available together by the centre and the states. And the best thing is that these schemes are designed such that it fits within the financial limit of the different categories, thus not causing any burden on them. Thus, people with an annual income of Rs 3 lakh per annum or people with an annual income of Rs 6 lakh per annum, both have a housing scheme. Check this guide to know about the top government housing schemes in the country in 2025 and how you can apply. 

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Who is a first-time home buyer under government housing scheme?

A first-time home buyer is one who doesn’t have any pucca residential house in his name or any of his immediate family members’ names. 

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Requirements for first-time homebuyer under government housing schemes

Mentioned below are requirements to be followed by first-time homebuyers. 

• Should not be an owner of any housing unit
• For EWS category- Annual income should be Rs 3 lakh and for LIG category-Annual income should be Rs 6 lakh
• No one in the family should have previously availed housing unit given to them under any government housing scheme. 
• All required documents should be submitted. Absence of any or submission of fake documents will result in application form being dismissed. 
• Women are given preference in all housing project schemes offered by the government with most stress registration of the property on women’s name as owners or co-owners.  

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Government housing scheme by centre

Mentioned below are the details of the government housing scheme announced by the centre. 

Pradhan Mantri Awas Yojana (PMAY) 2.0

Announced by the centre to fulfil the promise of ‘Housing for All’, the Pradhan Mantri Awas Yojana is in its second phase now with PMAY 2.0 to be rolled out between 2024 to 2029. This second phases a lot of improved features with an intent to fulfil people’s aspirations. 

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According to the official PMAY portal, PMAY-U 2.0 addresses affordable housing requirement in urban areas through following verticals:

1. Beneficiary Led Construction (BLC)

• EWS beneficiary to construct house on own land
• Provision of land patta/rights to the landless by states/UTs
• Geo-tag the construction stages of the house by beneficiaries
• Release of instalment is linked to construction stage
• Free of cost statutory approvals, if needed
• Upgradation of tenable slums with housing and infrastructure

1. Affordable Housing in Partnership (AHP)

• EWS beneficiary to purchase/avail allotted houses in apartment projects by public/ private sector agencies/ parastatal agencies 
• Redeemable housing vouchers for purchase of houses in whitelisted private sector projects 
• Various state incentives to public/private projects
• In-situ slum redevelopment of tenable slums or slum resettlement

1. Affordable Rental Housing (ARH)

• Model-1: Utilising existing government funded vacant houses by converting them into ARH under PPP mode or by public agencies. 
• Model-2: Construct, operate and maintain rental housing by private/public entities for urban poor, working women, employees of Industries, Industrial Estates, Institutions and other eligible EWS/LIG families.

1. Interest Subsidy Scheme (ISS)

• Maximum loan value Rs 25 lakh, maximum house value  Rs 35 lakh 
• 5 yearly instalments of loan subsidy 
• Annual household income: – EWS – up to Rs 3 lakh – LIG – up to Rs 6 lakh – MIG – up to Rs 9 lakh 
• EWS/LIG/MIG- Loan subsidy upto Rs 1.80 lakh

One can register for a housing unit PMAY 2.0 through a registered bank. On approval of loan, the application is forwarded to the Housing and Urban Development Corporation Limited (HUDCO) or the National Housing Bank (NHB). Once the loan is approved, the beneficiaries’ bank account gets the loan money credited. 

See also: MHADA lottery Pune extends FCFS scheme 2023-24 till August 2024

Documents required to participate in Government housing scheme 

Mentioned are the documents required:

• Aadhaar card
• Pan card
• Two photographs
• Domicile certificate
• Utility bills
• Income proof
• Self-attestation to mention possession of no pucca house
• Proof of category
• Proof of minority
• Proof of caste  

Government housing scheme by states

In addition to the PMAY 2.0, the different states offer affordable housing schemes to their citizens. These complement the PMAY scheme as well cater to unsuccessful applicants of the PMAY scheme. 

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Maharashtra

Mhada Lottery 

The Maharashtra Housing and Area Development Authority (Mhada) offers affordable housing through regular lotteries conducted across Maharashtra including Mumbai, Konkan region, Pune, Nagpur, Nashik, Chhatrapati Sambhaji Nagar etc. by the various Mhada Boards. The Mhada gives housing units to the EWS, LIG, MIG and HIG category and reports mention that some of the Mhada project costs are around 30-40% less than that of the market rate. 

Cidco lottery

The City and Industrial Development Corporation (Cidco) offers affordable housing in various nodes of Navi Mumbai. Under the Cidco Mass Housing Scheme, the Cidco is looking at providing over 67,000 housing units in Navi Mumbai-some lotteries of which are over and some in progress. 

DDA Lottery 

The Delhi Development Authority (DDA) housing schemes provide low cost houses across the Delhi-NCR. The DDA lottery offers these affordable housing to EWS, LIG, MIG and HIG categories. 

YEIDA lottery 

The Yamuna Expressway Industrial Development Authority (YEIDA) provides housing units and plots for sale along the route in the form of lottery. 

Telangana Indiramma Indlu Scheme 

The Telangana Indiramma Indlu Scheme is a housing initiative that provides financial assistance to landless and homeless families who clear the eligibility requirements in Telangana to construct permanent houses on their own plots. The scheme offers a 100% subsidy, with beneficiaries getting Rs 5 lakh as financial assistance for construction.  

Rajiv Swagruha Scheme 

The Rajiv Swagruha Scheme in Telangana offers MIG ready housing units at subsidized rates across Telangana.

LIFE Mission Project

In order to provide quality housing options to the underprivileged sections of society, the Kerala government offers the subsidised housing under the Livelihood Inclusion and Financial Empowerment (LIFE) programme. 

See also: DDA housing scheme 2025: How to apply online?

Home loan rates for first-time home buyers

How else can first-time homebuyers save money?

In addition to offering subsidised housing units, first-time home buyers also have many other options to save money when they opt for housing schemes offered by the government. Listed are them: 

Less stamp duty

Many states charge a flat Rs 1,000 as stamp duty on affordable housing. Also, some states offer a rebate on stamp duty for women registration. 

Tax benefits under section 80EE

First-time home buyers get an additional over Rs 50,000 as tax savings on the home loan interest over the Rs 2 lakh tax benefits. However, to avail this, the loan must be under Rs 35 lakh and the property value should be below Rs 50 lakh.

Tax benefits under section 80EEA: In case of house costs less than Rs 45 lakh, one can claim a tax cut of upto Rs 1.5 lakh. This combined with other tax benefits will help the beneficiary save upto Rs 2 lakh per annum. 

Jan Dhan account: With the presence of the Jan Dhan account, subsidy payments are faster. With the presence of these accounts, beneficiaries will get faster loan approvals. 

Private developers offering PMAY: There are many projects which sell ready-to-move projects that are adhering to PMAY guidelines and are vetted by the government. One can make use of these. 

Housing.com POV

While buying a house is the most fulfilling task, it is also intimidating for first-time homebuyers as it involves big investments. With an intention to help everyone own a pucca house, the government has come up with subsidy schemes for first-time home buyers which makes their journey of home buying easy – mentally and financially. These bridge the gap by offering tax rebates, stamp duty rebates etc. While applying for a government offered housing scheme, ensure that you have all documents in place, fall under the eligibility criteria and apply only through registered government portals. Once this is done, your dream house is just a step away.