Good news for NRIs who have left their parents in India ‘homeless’! The newly introduced scheme of “Pradhan Mantri Awas Yojana (PMAY)” emerges as a ray of hope to homeless elderly parents.

Many parents are left with pinching pennies in their old age. They turn blind eye to owning a house for themselves in their youth while dedicating all resources to their child’s education. As the time passes away, their efforts pay off. Their child gets employment in the multinational firm in the US, UK or any other foreign country. Consequently, he/she sets off to take charge of their professional responsibilities in abroad.

Meanwhile, he/she leaves their parents ‘homeless’ at the back. However, he/she wants to bear the responsibility of the parents. Distance and scarcity of funds shoot as a major boulder.

Now, NRIs don’t need to battle out with such critical situations.  The launch of PMAY has introduced healing scheme called PMAY. By enrolling to it, he/she can provide a nest to the homeless parents in India.

What is PMAY?

As aforementioned, it stands for Pradhan Mantri Awas Yojna. It is commenced for providing shelter to all homeless people in India on easy terms and benefits. This scheme has an entry under the title ‘MIG’ which denotes Medium Income Group. It’s a category added to this scheme. It is further segregated into two sub-sets which are:

• MIG I for those who have income between INR 6,00,000 and INR 12,00,000.
• MIG II for those who have income between INR 12,00,001 and INR 18,00,000.

What’s the eligibility criterion for enrolling to PMAY?

Since it’s a housing scheme, the NRIs can take care of their parents in India by registering for the house. But before that, they must drill in their head the eligibility criterion, subsidy and home area. Catch on these points that display what this scheme requires for registration:

Eligibility:

• The couple would be treated as a ‘beneficiary family’ of this scheme. It comprises of a husband, wife, unmarried son(s)/ unmarried daughter(s). If the beneficiary family has another couple or earning person in the family, it would be treated as a separate beneficiary family. It also can apply for the house under this scheme separately provided that it also doesn’t have any pucca house.
• It should not have any pucca house is their name.
• They should not be getting central assistance under any housing scheme from the government of India.
• The couple living in a rental house will be a separate household. Therefore, the parents of NRIs who accommodate rental house can apply for the same.

Subsidy: It’s a parliamentary grant to the sovereign of the state needs. It benefits the low income group by keeping the price of the housing or commodities as low as it can afford.

This housing scheme has also a provision of subsidy grant. The NRIs can apply loans for their parents at subsidized rate. But the rate is different for both segments. These are:

• MIG I is eligible for 4% subsidy on a loan up to INR 9 lakh.
• MIG II is eligible for 3% subsidy on a loan up to INR 12 lakh.

The categorization defines the limit to which extent the subsidies can be granted. If anyone wants to borrow more money as loan, he/she can grab it. But the subsidy will not applicable on the additional loan amount.

Suppose an expat wishes to buy a house worth INR 50 lakh for his parents. He has to pay 20% of the total cost as down payment. As 3 percent subsidy is applicable for the amount up to INR 12 lakh, the subsidy would be applicable on that amount only. The balance amount, i.e. worth INR 38 lakh, can be borrowed as loan but it would be available at subsidized rate.

Adjustment of subsidy: The interest subsidy amount will be the net present value (NVP) (the difference between the present value of cash inflows and cash outflows).  Under the scheme, 9 percent discount will be applicable on this value. Loan’s amortization schedule is a must since interest amount of the each EMI is to be considered.

Loan: It is not essential that only government bodies would be open for subscribing loan for PMAY. The expat can contact a developer or builder for buying a house from the secondary market. If he is willing to construct it, he can do so also by taking loan.

No home loan provider can reject application for loan under this scheme. Be it for the purpose of adding a room, kitchen or balcony to the existing house, he can apply for the loan.

Length & breadth of home:

Under these two categories, the land area is mentioned as:

• For MIG I, 90 sq ft (968.752 sq ft) would be granted as carpet area. The carpet area means the length and breadth excluding walls that are covered by a laid carpet. It’s different from built area which includes the thickness of the inner walls.
• For MIG II, 110 sq ft (1184.03 sq ft) would be availed.

How can NRIs provide home to their homeless parents under this scheme?

Since the wholesome amount of the home is difficult to arrange for the expats, they can contact lending institutions in India. The following list of banks would provide easy finance under nri services at no processing fee if the loan is taken at subsidy. The balanced loan amount would require nominal processing fee.

• Scheduled commercial banks
• Housing finance companies
• Regional rural banks
• State Cooperative banks
• Urban Cooperative banks
• Small Finance banks
• Non-Banking Financial company