The government is likely to introduce significant revisions to the Pradhan Mantri Awas Yojna (Urban) scheme, expanding the Interest Subsidy Scheme (ISS) eligibility on home loans. According to a report by the Times of India, urban households with an annual income of up to Rs 9 lakh will likely be able to avail interest subsidies for home loans under the newly approved scheme. This applies to properties measuring up to 120 square meters.

The revised scheme aims to financially relieve poor, low-income, and middle-income groups, the TOI report added. Previously, the income limit for the interest subsidy benefit was set at Rs 18 lakh, applicable to properties up to 200 square meters. Additionally, the maximum interest subsidy has been reduced to Rs 1.8 lakh from the earlier average of Rs 2.3 lakh.

The government has also introduced provisions to incentivise the construction of affordable rental housing (ARH) for migrant workers, students, and working women's hostels in urban areas. Entities using new technologies to build such facilities will receive assistance of approximately Rs 1.5 lakh for one-bedroom units measuring 30 square meters. These dwelling units will consist of single bedrooms up to 30 square meters, double bedrooms up to 60 square meters with living areas, kitchens, toilets, and bathrooms, and dormitory beds with carpet areas of up to 10 square meters each.

To enhance transparency and accessibility, a web-based interface will soon be launched, allowing potential tenants to view live details of available units and dormitories for booking. The rent for these units will be determined by local authorities based on surveys of the surrounding area and can be revised every two years by a maximum of 8%, with a cap of 20% over five years.

In a bid to tighten the interest subsidy scheme and ensure compliance, the government has revised the eligibility norms. Beneficiaries taking loans of up to Rs 25 lakh for a house costing a maximum of Rs 35 lakh will now be eligible for a 4% interest subsidy on the first Rs 8 lakh of the loan for up to 12 years. The subsidy will be disbursed in five-yearly installments, and beneficiaries can access their accounts through a website, OTP, or smart cards.

The updated PMAY (Urban) scheme, referred to as PMAY 2.0, also includes two other key components: Beneficiary Led Construction (BLC) and Affordable Housing in Partnership (AHP). Under these components, households with an annual income of less than Rs 3 lakh, categorized as Economically Weaker Sections (EWS), can receive financial assistance of up to Rs 2.5 lakh for constructing a house on their own land or government-provided land, or for purchasing a flat. The earlier In-Situ Slum Redevelopment (ISSR) component has been subsumed into AHP, with increased assistance of Rs 2.5 lakh compared to the previous Rs 1 lakh.