Central Govt Plan: Increase Home Loan Amount to Low Income Group..!


The Ministry of Housing and Urban Poverty Alleviation aims to target around a 10 lakh households through the Rajiv Rin Yojana (RRY), which provides subsidised housing loans to people from economically weaker sections for buying houses.

Under the revised terms, a household from the economically weaker section (EWS) will be provided a loan of up to र 3 lakh for buying a house with a 5% interest subsidy a year and a repayment period of up to 20 years.

Under the same scheme, households in the low income group (LIG) category will get loans up to र 5 lakh and with the same terms.

A senior housing and urban poverty alleviation ministry official, said, "We have floated a Cabinet note on increasing the home loan amount in the EWS & LIG category, which is under inter-ministerial consultation now. We have said it that we expect about a 10 lakh people to benefit from the scheme. That is our target but it will depend on the funds we get from the central government in the Union Budge,"

The scheme implementation will also depend on the willingness of banks to lend.

Now, home loan limit in the EWS category is र 1 lakh the LIG category is र 1.80 lakh.  The primary reason for the lukewarm response to the scheme has been due to lack of willingness on the part of banks to provide loans to EWS and LIG segments.

Sametime, the ministry is hopeful of getting a big response this time. The ministry feels that the government's announcement in November, 2012 to raise the bar on annual income required to qualify for benefits under its existing housing schemes for EWS and LIG category will help in getting more beneficiaries.

Urban poor with an annual household income of up to र 1 lakh (up from र 60,000) are being classified as EWS and those between र 1 lakh and र 2 lakh (up from र 1.20 lakh) have been categorised as LIG.

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