Home loans in rural areas get cheaper now

Aiming to ease EMI burden by ensuring cheap home loans in rural areas, the Centre on Tuesday approved 3 per cent interest subsidy on loans of upto `2 lakh for all households which are not covered under Pradhan Mantri Aawas Yojana (Grameen).

“The government is committed in its mission to ensure housing for all by 2022. The interest subvention will not only reduce the equated monthly instalment (EMI) burden on the poor but will also help them in further construction or expansion of their current homes,” rural development minister Narendra Singh Tomar told news agencies.

It will also create employment opportunities in rural housing sector, Mr Tomar added. The scheme was approved by Cabinet on Tuesday, within a month of Prime Minister Narendra Modi’s announcement during his address to the nation on the New Year’s eve.

Interest subsidy would be available to every rural household which is not covered under the PMAY(G), The government is committed in its mission to ensure housing for all by 2022. This will not only reduce the EMI burden but will also help people in further expansion of their existing homes Narendra Singh

Tomar, under which the government aims to construct about 44 lakh houses, the rural development ministry said in an official statement.

The scheme would also enable people in rural areas to construct new houses or add to their existing pucca houses to improve their dwelling units.

National Housing Bank (NHB) would implement the scheme and the government would provide net present value of the interest subsidy of 3 per cent to it. NHB will, in turn, pass it to the primary lending institutions, like scheduled commercial banks, NBFCs and others.