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How to Buy Affordable Housing?

How to Buy Affordable Housing?

Owning a house is a milestone that most people are still striving hard to achieve. It involves not just the cost of the house but also innumerable additional expenses.

But to make this dream achievable for people from all walks of life, the Indian Government and various state governments offer multiple schemes and subsidies. Such inducements have made budget homes very popular among today’s home buyers.

Government schemes to facilitate affordable housing

1. Pradhan Mantri Awas Yojana (PMAY)

The PMAY national scheme was introduced to aid the Economically Weaker Sections of society in buying a home. It has two wings – the urban and rural counterparts. The urban division offers interest rate subsidies on housing loans based on the buyer’s income slab. The rural division was introduced to ensure every family had at least a pucca house with basic facilities. The program offers many low-cost housing options for first-time homeowners.

2. Rajiv Awas Yojana

This program was implemented to help eliminate slums in India. It offers financial support to the Centre, states, Union Territories, and Urban Local Bodies to build public housing. This scheme made social housing accessible to the economically backward by promoting public-private partnerships.

Additional Read: Home Loan in Delhi

3. Delhi Development Scheme

This housing plan offers housing assistance to Delhi’s low-income citizens. In this scheme, you can register under the suitable category, and if found eligible, a flat will be allocated to you based on computerised draws at a reduced rate. This plan also promotes new apartment constructions by offering discounts up to INR 5 lakhs.

4. Haryana Housing Board

The Haryana housing board introduced a scheme that allocates plots to registered and eligible people from the economically weaker section of Haryana. This involves allocating around 6200 plots from all over the state, with basic amenities like power, water, sanitation, transportation, and correspondence.

5. Maharashtra Housing and Area Development Authority (MHADA)

The MHADA lottery program allocates houses to registered applicants of various economic classes. A specific quota is set aside for the economically weak to give them an additional boost.

6. Tamil Nadu Housing Board

To provide housing to every resident, the Tamil Nadu housing board has implemented schemes to make affordable housing a reality for the economically backward people of Tamil Nadu.

Planning a home budget

In India, affordable housing in a metro city is defined as a home that costs less than 45 lakhs and has a carpet area of 60 sq. mt. or less. In a non-metro city, the carpet area could be up to 90 sq. mt. The biggest advantage of such low-cost housing is its reduced GST rate.

Buying a budget home can be done easily with the right research. Through some government subsidies, your housing cost burden may be lightened but not fully eliminated. You can contact a financial institution for a housing loan to help with the rest of the payment.

Going for a housing loan is a smart idea when buying affordable housing because the lender would perform a thorough physical and legal evaluation of the property and determine its estimated value. The lender would only be willing to lend you up to 75-90% of this estimate. So using this as a guideline, you can negotiate with your seller and ensure you only pay the fair price for the property and not more.

When buying a home, budget projects by private constructors may be in demand and more competitive. In such cases, having a pre-approved loan or eligibility letter from your lender that confirms your home loan eligibility can give you an added advantage over your competitors.

Over to you

At Tata Capital, we offer flexible home loan to help you make your dream home a reality. Our competitive interest rates make us one of India’s most preferred housing loan partners. Contact us today to know more!

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