Government Introduces Subsidy Scheme of ₹60 Billion for Home Loans in Cities, Benefiting 2.5 Million People

In a bid to fulfill the dreams of people residing in slums and rented accommodations in cities, the Central Government is set to launch a ₹60,000 crore home loan subsidy scheme. Keeping an eye on the upcoming legislative and parliamentary elections, this scheme could kick off in the next few months.

Under this, loans of up to ₹9 lakhs will be available at an annual subsidy rate of 3-6.5%. Those seeking loans of less than ₹50 lakhs for a tenure of up to 20 years will qualify for this scheme.

This scheme will be distinct from the current Prime Minister Awas Yojana – Urban, which is set to provide approval for 1.18 crore houses. The PM Awas Yojana, initiated on June 22, 2015, aimed to provide permanent housing to families residing below the poverty line, in kachha houses, and slums.

From an economic standpoint, this scheme will greatly benefit homebuyers and the real estate sector. It will provide essential support to numerous projects that can create employment opportunities in various fields. Homebuyers and the real estate industry will receive incentives, resulting in an economic boost.

25 lakh People to Benefit from the New Scheme In the new Scheme

The grant provided by the government will directly benefit the beneficiaries’ accounts until the year 2028. The plan is currently awaiting approval in the Central Cabinet and is expected to commence shortly. This will bring benefits to 25 lakh people residing in urban areas, depending on the demand for homes.

Banks have not been given any specific targets in this regard. Bank officials are currently in discussions with government authorities to initiate the process of identifying beneficiaries.

Prime Minister Modi had mentioned this during his speech on August 15th. Currently, the Chief of Central Housing and Urban Affairs, Hardeep Singh Puri, had stated that the new home loan subsidy scheme for urban homebuyers is likely to be finalized in September.

On August 15, Prime Minister Modi had stated that people living in urban slums, colonies, and unauthorized settlements, who dream of owning their own homes, will be provided assistance. If they wish to build their own homes, they will receive financial assistance in the form of reduced interest rates on loans from banks.