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Top Government Schemes For Home Loan In India

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Buying a house is perhaps one of the biggest milestones one can ever undertake which come with financial constraints. Fortunately, there are different government schemes for home loans that help those, who want to own a home, make their desire come true. These schemes depict some of the best interest rates and flexible repayment terms in an organisation. Also it is important to note that before opting for a home loan, there is a need to ensure that you have home insurance also referred to as property insurance. Know more about the top government schemes that are available to help the people to buy homes.

Central Government Schemes For Home Loans

Purchasing a house is one of the biggest dreams for every citizen of India. People among the different sectors of the government have understood the idea of affordable housing by offering different financial facilities and policies. Of these, the two major plans are PMAY and RAY, with the former being all the more recognised amongst the citizenry. The following are the schemes analysed below, and in it is explained with regard to their purpose, characteristics, advantages and the conditions of participation.

1. Pradhan Mantri Awas Yojana (PMAY) – housing mission for the urban poor

PMAY started on 25th June 2015 and targets to achieve affordable housing for all the urban poor by the year 2022. The vision is to have “Housing for All” in order to embrace the government's largest aim of developing the urban structure and the living conditions of people. In the implementation of PMAY, the government provides credit linked subsidies for the home loans for the low income to middle income income groups.

Objectives

• Housing for the people dwelling in towns and cities must be reasonable to ensure.

• Expansion of sustainable and integrated development issues in urban environments.

• Improve residents’ quality of life through the integration of environmental factors in designing housing options.

2. Rajiv Awas Yojana (RAY)

Introduced in July 2009, RAY was planned to be a guideline to execute the big plan of slum rehabilitation across urban areas of India. The scheme was launched so that the homeless and residents of slums are provided with durable housing structures, also the primary needs of the society. Slum development and the encouragement of a holistic, long-term strategy to housing is RAY’s core area of operation.

Objectives

• Communities that experience slums should be eliminated and affordable houses should be provided.

• Ensure that there are basic needs as well as facilities for shelters for the urban dwellers.

• Engage the community in the planning as well as the implementation process.

Comparison of PMAY and RAY

State Government Schemes for Home Loans

1. Kerala Housing Board Housing Scheme

This subsidised housing scheme is run by the Kerala Housing Board and is available for all the residents of Kerala.

Kerala Housing Board has been the key housing agency of the state that offers cost effective solutions to housing issues of residents of the state. The objectives of this scheme include affordability to different categories of house seekers especially the EWS and LIG. In this regard, the board affords complete housing solutions such as residential apartments and plots. Home loans fall under this category and there is the provision of loans from government departments in order to enable individuals to fix homes. Also, the scheme aims at encouraging eco concentrated housing through the use of environment friendly designs and constructions.

2. Suraksha Housing Scheme

This housing scheme launched by Kerala Government aimed to construct houses for the people who lost or affected houses in natural calamities like floods and landslides. The government through this scheme demonstrates its willingness and readiness to ensure that people who are affected get a shelter and the calamity recovery process is accomplished at the same time. There are some recommended beneficiaries who are given the option of receiving low-interest loans or grants to be used to reconstruct their homes. Through the Home Loans that are provided under the Suraksha Housing Scheme, the needy and the affected are again given a chance to stand.

3. New Suraksha Housing Scheme

New Suraksha Housing Scheme is a further improvement of the Suraksha Housing Scheme meant to foster the existing housing stock in disaster-affected areas besides offering new features for safety. This enhanced scheme, especially tries to improve the disaster-resistance housing designs and infrastructure. As much as the New Suraksha Housing Scheme offers loans easily and at lower interest rates, these schemes compel families to build new homes that are safe and can withstand the effects of disasters in future.

4. MHADA

This refers to Maharashtra Housing and Area Development Authority. It is also worth acknowledging that MHADA is responsible for the shortage of housing in the state of Maharashtra especially within the larger cities. The authority is especially famous for implementing economical housing schemes particularly for the low-income categories of population, and offers a range of programs for distinct sectors of the society. MHADA provides houses based on the lottery system where the people who apply, can get possession of houses at nominal prices. Also, they provide home loan facilities at a cheaper and reasonable interest rate with flexible payback periods that enable first-time home buyers to afford the homes. MHADA’s undertakings aim at addressing problems of efficient development of urban areas while at the same time adhering to modern standards in the construction of houses.

5. Delhi Development Authority Housing Scheme

The Delhi Development Authority still acts as one of the significant organisations for formulating policies and executing schemes for urban development and housing in the national capital. Further, the DDA Housing Scheme has been designed for the large populace to avail the facility by offering accommodation in different categories LIG, MIG and HIG. It also has a preference for a lottery as the method of allocation to increase the number of people following and to ensure that the scheme is honest. Also, the DDA provides lower interest home loans to rightful owners as a means of encouraging home ownership in urban Delhi. And for this reason, the DDA works hand in hand with banks and other financial institutions to ensure that beneficiaries get the best deal as far as loans are concerned in their bid to own a house.

FAQs

1. Can the stakeholders of a home insurance policy be equated to the government home loan schemes?

While not being a direct element of the government schemes for home loan, a home insurance policy is a necessity or an advised product while availing a loan. Property evaluation serves the purpose of shielding the objective against possible damages, so that your stake is not harmed. Most of the time the lender may also want the borrower to agree to a property insurance policy as a condition for approving a home loan.

2. In legal and insurance, whether people need to have property insurance, especially when they will apply for the government scheme for the home loan?

While property insurance is not mandatory for every case, there is a common practice among lenders to recommend getting a home insurance policy when applying for a home loan and availing the government schemes for the same. This also helps to ensure that the property is financially secure and as a result in the unfortunate circumstance where the property is destroyed or damaged; the homeowner and the lender has secured his/her financial interest on the property.

3. Is it possible to have more than one Government home loan scheme or more than one private home insurance policy?

Yes, you can club government schemes for home loans with any of the private home insurance policies that are available in the market. The schemes help in loan affordability by enabling subsidies based on the government schemes; however, for additional protection and safety, a separate home insurance policy is available that covers your property.

Conclusion

Most government schemes for home loans involve provision of considerable amounts of funds and promote prudent use of properties and insurance. These include enhancing the housing finance for homebuyers with these initiatives, as well as availing protection of their investments by taking the right home insurance policy and property insurance. Working towards increasing home ownership as well as catering to the housing requirements of the LMI segment in India, these schemes offer enhanced access to relatively cheaper funding.

Disclaimer

The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

 

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