Here’s how IMGC adds on to the benefits of the PMAY

India has seen a lot of socio-economic development over the last few decades but one problem that still looms large in the country is that of lack of adequate shelter. As per the 2011 census, about 0.15% of the country’s population is homeless and this is something that acts as a major roadblock in the way of the country’s development. 

In order to resolve this major issue, the country’s government has come up with the Pradhan Mantri Awas Yojna to make affordable housing a reality for many. This ambitious project has made way for many people from the low income group to own a home. The key features of this scheme are:

• The government provides subsidy to people from the LIG and EWS segment in the range of 1 to 2.30 lakhs.

• Under this scheme, people from the LIG and EWS segment can also get subsidized rates on home loan which is only 6.5%.

• The subsidized interest rate is applicable only for an amount of up to six lakhs.

• People from the LIG and EWS category can also avail a loan under this scheme to renovate their house provided the house is not bigger than 30 square meters.

Therefore, as you would agree, with this comprehensive scheme, the government has indeed made owning a home a possibility for even the less privileged. In addition, the introduction of the mortgage guarantee linked home loans has added to the convenience of the loan applicants as people can now opt for higher loan amounts with ease.

How has the India mortgage guarantee corporation benefitted the PMAY?

The IMGC, was launched in the year 2012 and it was initiated with the aim to lessen the risk of the lenders and in turn increase the borrowing capacity of people. Since, this insurance or mortgage guarantee covers the risk of the lenders, housing finance corporations and banks are able to sanction higher loan amounts and even increase the repayment tenure to beyond the retirement age. 

Therefore, it would not be wrong to say that the PMAY and IMGC are working together to make affordable housing a reality for all in the country.