Housing finance companies may miss out on festive demand

Housing finance companies (HFCs) are eagerly anticipating the implementation guidelines for the Pradhan Mantri Awas Yojana (PMAY) subsidy scheme and the Affordable Housing Refinance Scheme. These schemes were expected to be rolled out during the festive season to boost demand, but as of now, the guidelines have not been communicated by the government. HFCs are particularly waiting for clarity on how to apply for the PMAY subsidy and for the National Housing Bank (NHB) to issue a notification for the refinance scheme.

Under the PMAY scheme, homebuyers can avail a loan subsidy of up to Rs 2.8 lakh on loans with a maximum value of Rs 5 lakh. This subsidy will be paid in five yearly installments of Rs. 36,000. The subsidy amount will be constant at Rs 2.8 lakh for the economically weaker section (EWS), lower income group (LIG), and mid-income group (MIG) customers with an annual household income of up to Rs 3 lakh for EWS, up to Rs 6 lakh for LIG, and up to Rs 9 lakh for MIG.

Regarding the refinance scheme, HFCs can avail of refinance from the Affordable Housing Fund for affordable housing loans disbursed in the previous 12 months. The refinance offered by NHB will be at a fixed rate of interest of around 5% per annum.

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