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Tips to Buy Affordable Homes in India

By IIFL Home Loans | Published On Oct 20 2023 10:06 AM 1 min read 306 views 696 Likes
IIFL Home Loans

The dream of owning a home transcends boundaries and cultures. In India, this dream is no different, but it often comes with the added challenge of affordability. The soaring real estate prices in metropolitan areas, coupled with the rising cost of living, can make homeownership seem like an unattainable goal for many. However, NBFCs and government housing loan schemes have helped make this dream a reality for millions of Indians. With competitive interest rates and flexible terms, IIFL Home Loans can help you realise your dream of owning a home. Apply now!

What Is Affordable Housing?

Affordable housing includes residential properties that are priced within the budget of middle and lower-income groups. These housing units are designed to offer basic amenities, security, and comfort to individuals and families at a cost that is affordable to them. 

Affordable Housing in India

How to Buy Affordable Housing in India?

To buy affordable housing in India, you could explore government-funded programs designed specifically for low-income groups or home loan options from private lenders/NBFCs. The choice depends on your circumstances, financial situation, eligibility, and preferences. 

If you meet the eligibility criteria for government programs like PMAY and CLSS (described below), they can be highly beneficial due to their interest rate subsidies and lower down payment requirements.

If you don't qualify for government programs or prefer more flexibility in loan terms, private lenders, including NBFCs, may be your best option. NBFCs such as IIFL Home Loans offer housing loans at competitive interest rates, especially for borrowers with good credit histories. They may also be more willing to accommodate unique financial situations.

Let’s look at each option in more detail.

Government Housing Loan Schemes

The following government housing schemes are designed to provide financial assistance to families belonging to low-mid income categories. 

List Of Government Housing Schemes In India:

Pradhan Mantri Awas Yojana (PMAY) - Urban

PMAY Urban aims to provide affordable housing solutions in urban areas across India by promoting the construction and renovation of homes for economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG). 

Pradhan Mantri Awas Yojana (PMAY) - Gramin

PMAY Gramin focuses on providing affordable housing solutions and the construction of pucca houses in rural areas of India. Beneficiaries include homeless individuals, households without shelter, and those living in dilapidated or kutcha houses. Priority is given to SC/ST and minority communities. Landless and manual scavenger families are also eligible.

Credit-Linked Subsidy Scheme (CLSS) 

A component of PMAY, CLSS offers interest rate subsidies on home loans for eligible beneficiaries based on their income category, ensuring a tailored approach to affordability. Each category has its own set of income criteria.

Rural Housing Interest Subsidy Scheme (RHISS) 

RHISS is targeted at rural areas and offers interest subsidies on loans for the construction and repair of homes, for those who are not eligible under PMAY. This government scheme for house construction requires one to follow the standard structural safety guidelines.

HUDCO's Individual Housing Loan Scheme 

The Housing and Urban Development Corporation (HUDCO) is a fully owned government entity that offers individual housing loans to economically weaker sections (EWS) and low-income groups (LIG). The loans are sanctioned at lower interest rates, promoting affordable homeownership. 

Affordable Housing Finance From NBFCs

Low-cost housing finance with NBFCs

You could buy affordable housing in India with financing from non-banking financial companies or NBFCs. For instance, IIFL Home Loans is an NBFC that offers affordable loans for housing to home buyers in the EWS/LIG category and in tier-2 and tier-3 cities. They basically bridge the gap between traditional banks and the housing needs of various income groups. Here are more reasons why a home loan from an NBFC should be on your checklist:

  • NBFCs design housing loan products tailored to the needs of specific income groups at lower interest rates, with longer repayment tenures, and smaller down payments.

  • NBFCs typically have streamlined processes and quicker loan approvals, making it easier and faster for applicants to secure housing finance.

  • NBFCs often cater to borrowers seeking smaller loan amounts, which enables individuals with lower incomes to access financing for their homes.

  • NBFCs offer a range of financing options, including home improvement loans, construction loans, and loans for the purchase of affordable housing units in both urban and rural areas.

To Sum Up!

Owning a home in India is a cherished aspiration, and affordable housing initiatives by NBFCs and government schemes for home loans have made this dream more attainable for a broader section of the population. However, potential beneficiaries must verify and meet the specific eligibility conditions to avail of the benefits and support offered. Apply for a home loan with IIFL Home Loans and take the first steps towards becoming a proud homeowner!

FAQs

1. What are the eligibility criteria for a home loan at IIFL Home Loans?

You should be a salaried or self-employed resident of India in the age bracket of 18 to 75 years.

2. Who is eligible for affordable housing in India?

To be eligible under the PMAY affordable housing scheme, you should not have another house anywhere in the country and your annual household income should be as follows:

  • Economically Weaker Section - Up to Rs. 3 lakh

  • Lower-Income Group - Rs. 3 lakh – Rs. 6 lakh

  • Middle-Income Group I - Rs. 6 lakh – Rs. 12 lakh

  • Middle-Income Group II - Rs. 12 lakh – Rs. 18 lakh

3. How to apply for a home loan at IIFL Home Loans?

You can visit IIFL Home Loans, navigate to the home loans page, and apply for a home loan with relative ease. You would also have to submit relevant documents for approval. 

4. What to do if I don’t qualify for government housing schemes?

You could explore affordable financing options by NBFCs such as IIFL Home Loans, which offer loans at competitive interest rates. 

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