Houses with 2,100 sq ft carpet area now eligible for interest subsidy

The government has increased the eligibility limit for urban housing for interest subsidy under the Prime Minister’s Awas Yojna (PMAY) for middle-income group (MIG) by 33 per cent, to cover houses with carpet area up to 2,100 sq ft.

Accordingly, households with an annual income of up to Rs18 lakh can now avail themselves of Rs2.3 lakh upfront subsidy for a house measuring up to 2,100 sq ft. Households with income of Rs6-12 lakh fall within the MIG-1 category, while those with income between Rs12-18 lakh qualify as MIG-2.
The move is intended to bring more beneficiaries under the PMAY fold and achieve the target of ‘housing for all’ by 2022.
So far, houses with a carpet area up to 120 sq m (1.291 sq ft) for MIG-I and up to 150 sq m (1.614 sq ft) for MIG-II were eligible for interest subsidy. They have been increased to 160 sq m (1,722 sq ft) and 200 sq. m. (2,153 sq ft), respectively.
Shares of companies providing affordable housing projects rose on Wednesday after the government approved a 33-per cent increase in carpet area of houses eligible for interest subsidy under its affordable housing scheme Pradhan Mantri Awas Yojana-Urban.
The new measure will have an impact on the housing sector, especially in Tier II and Tier III cities where the housing industry has more space for leveraging on land prices. MIG-1 and MIG-2 are also seen as two segments that need maximum government support to access housing within their budget.
The decision to increase the carpet area for interest benefit under the credit linked subsidy scheme is yet another step in the direction of expanding the beneficiary base for government schemes to promote the housing sector.