PMAY-U 2.0 approved: 1 crore urban homes for low-income families underway by 2029

Housing for millions: The Union Cabinet has given the green light to the Pradhan Mantri Awas Yojana-Urban 2.0 (PMAY-U 2.0), an initiative aimed at constructing 1 crore (10 million) residential units for economically weaker sections, low-income, and middle-income households across urban areas. This expansive project is set to span five years, from 2024-25 to 2028-29.

Under PMAY-U 2.0, eligible families those without a durable 'pucca' house can receive financial assistance to build or purchase homes. Assistance amounts will be Rs 1.2 lakh for homes in plain areas and Rs 1.3 lakh for those in North Eastern Region states, hill states like Himachal Pradesh and Uttarakhand, and Union Territories including Jammu & Kashmir and Ladakh.

Rs 10 lakh crore urban push

This massive housing initiative is part of the Narendra Modi-led government’s ongoing efforts to improve living conditions in urban areas. The project will involve an investment of Rs 10 lakh crore, of which Rs 2.3 lakh crore will come from government subsidies.

So far, in the initial phase of PMAY-U, 1.18 crore houses have been sanctioned, with over 85.5 lakh homes already completed and handed over to beneficiaries.

The PMAY-U 2.0 will provide significant relief to families living in rented housing, slums, and unauthorised colonies, offering them the opportunity to own homes. Families from economically weaker sections (with annual incomes up to Rs 3 lakh), low-income groups (with annual incomes between Rs 3 lakh and Rs 6 lakh), and middle-income groups (with annual incomes between Rs 6 lakh and Rs 9 lakh) are all eligible for the scheme.

Housing loan security increased

Additionally, the government has boosted the corpus of the Credit Risk Guarantee Fund Trust (CRGFT) from Rs 1,000 crore to Rs 3,000 crore, ensuring affordable housing loans are backed by a credit risk guarantee.

An Interest Subsidy Scheme has also been introduced, offering a 4 per cent interest subsidy on home loans up to Rs 25 lakh, with a house value cap of Rs 35 lakh. This subsidy will be applied to the first Rs 8 lakh of the loan for up to 12 years, with beneficiaries receiving a maximum of Rs 1.8 lakh in installments over five years. Access to the subsidy will be streamlined via website, OTP, or smart cards.

PM Modi highlighted this initiative in his 2023 Independence Day speech, stressing the government's focus on improving living conditions for lower-income and middle-class families by helping them realise the dream of homeownership.