- Date : 29/09/2023
- Read: 3 mins
The recently reported new Modi Govt Scheme is expected to ease urban home buying for low-income households. Find out more.
The new Modi Govt scheme is reported to be a home loan interest subsidy scheme for small home buyers. This is expected to benefit over 2.5 million home loan applicants from the low-income group.
This Modi Govt scheme offers interest subsidy to low-income, urban home loan borrowers
It is expected to give benefits of Rs 60,000 crores
Beneficiaries will receive an upfront subsidy credited to their account
New Modi Govt Home Loan Subsidy Scheme Details
According to initial reports, here are some of the key information on the new Modi Govt Home Loan Subsidy Scheme –
An annual interest subsidy of 3-6.5% is expected to be provided on up to Rs 9 lakh of the loan amount
Home loans of up to Rs 50 lakh to be repaid in up to 20 years will fulfil the new Modi Govt Home Loan Subsidy Scheme eligibility
This Modi Govt scheme will cater to nearly 25 lakh low-income group borrowers in urban areas
Families living in rented accommodations, slums, chawls and unauthorised localities will benefit from this Modi Govt scheme
An amount of Rs 60,000 crores could be spent on this scheme in five years
A meeting between the government and lenders is expected soon, which should confirm the launch date
The Previous Government Home Loan Scheme
This scheme will not be the first of its kind. A similar scheme was active in India during the period 2017-22. Announced in December 2016, an interest subsidy of 3-4% was available across different income slabs. Middle-income households with annual income of Rs 6 to 18 lakhs were eligible for this scheme.
It is reported that nearly 1.23 crore homes were sanctioned under this scheme.
Effect Of The Modi Govt Scheme
For the home buyer, this Modi Govt scheme will lead to a reduction in the EMI amount. With the interest component charged heavily in the early parts of the loan tenure, the subvention will be a welcome relief. Home loan borrowers eligible for this Modi Govt scheme will have their accounts credited upfront with the interest subvention amount.
For real estate companies, schemes like these are an encouragement to launch new projects. With millions of new home loans potentially getting sanctioned, it is good news for the real estate industry and stock investors.
The upcoming state and central elections are certainly on the radar as the government approves welfare schemes like this one. Notably, LPG prices were slashed by 18% last month.
As for the borrowers, let us hope that the scheme benefits are successfully cascaded to the low-income urban home-buying population in the days ahead.
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