PMAY-Urban 2.0: Who Is Eligible, ₹1.8 Lakh Interest Subsidy and How to Apply

Last reviewed: 4 November 2026

The short version

PMAY-Urban 2.0 helps urban families who do not own a pucca house to build, buy or rent a home. It was approved on 9 August 2024 for five years starting 1 September 2024, with a target of 1 crore urban families. This guide is for city and town residents. Rural housing is a separate scheme (PMAY-Gramin) applied for through the gram panchayat.

Try it: use our home loan EMI and PMAY subsidy calculator to see your EMI and whether you may qualify.

Start here: which route fits you?

Your situation	Likely route
Own land, family income up to ₹3 lakh, want to build or improve a house	Beneficiary-Led Construction (BLC)
Income up to ₹3 lakh, want to buy a ready 30–45 sq m home	Affordable Housing in Partnership (AHP)
Migrant worker or urban poor needing rented housing	Affordable Rental Housing (ARH)
Taking a bank home loan for a house up to ₹35 lakh (income up to ₹9 lakh)	Interest Subsidy (CLSS)

Who is eligible? (annual family income)

Group	Income limit
EWS (Economically Weaker Section)	Up to ₹3 lakh
LIG (Low Income Group)	Up to ₹6 lakh
MIG (Middle Income Group)	Up to ₹9 lakh

You are not eligible if you or your family already received a house under any government housing scheme, rural or urban, in the past 20 years, or if an earlier PMAY-U approval for you was cancelled after 31 December 2023.

The four ways to get help

1. Beneficiary-Led Construction (BLC): if you own land, EWS families can get up to ₹2.5 lakh to build or improve a house on it.
2. Affordable Housing in Partnership (AHP): EWS buyers can buy a 30 to 45 sq m home built by public or private builders, with central assistance of ₹2.5 lakh.
3. Affordable Rental Housing (ARH): rental complexes for migrant workers and the urban poor.
4. Interest Subsidy (CLSS): for taking a home loan to buy, build or buy a resale house.

The home loan interest subsidy, in numbers

• 4% interest subsidy for loans taken after 1 September 2024.
• House price up to ₹35 lakh.
• Subsidy applies on a loan of up to ₹8 lakh, for a tenure of up to 12 years.
• Total benefit up to ₹1.8 lakh, paid in five yearly instalments.

The point most people miss: the subsidy is calculated only on the first ₹8 lakh of your loan, not the whole loan. Suppose you buy a ₹28 lakh home with a ₹22 lakh loan. The subsidy works on ₹8 lakh of it. The remaining ₹14 lakh is charged at your bank’s normal rate. The subsidy lowers your cost by a fixed amount; it does not make the whole loan cheaper.

Documents

• Aadhaar details of the applicant and family members
• Aadhaar-linked bank account (account number, branch, IFSC)
• Income proof
• Caste certificate if you are SC, ST or OBC
• Land papers, if applying under BLC

How to apply, step by step

1. Go to the official PMAY-U 2.0 portal, or visit a Common Service Centre, or your municipality (Urban Local Body).
2. Check eligibility with Aadhaar details and income.
3. Choose the component: BLC, AHP, ARH or interest subsidy.
4. Fill in the form, upload documents, and note your application number.
5. For the subsidy, apply through the bank or housing finance company that gives your home loan. They route it.
6. Keep your application number and check status on the portal or at your municipality.

Before you apply: a checklist

• Does anyone in your family already have a house from a government scheme in the last 20 years?
• Is your total family income inside the group you are applying under?
• Is the bank account linked to Aadhaar and active?
• If building: do you have clear land papers in your or your family’s name?
• If taking a loan: is the house price within ₹35 lakh and is the loan sanctioned after 1 September 2024?

Common mistakes

• Paying a middleman for a “guaranteed” sanction. Applications are free on the official portal and through municipalities and CSCs.
• Assuming the subsidy covers the full loan. It is calculated on up to ₹8 lakh only.
• Applying with an income proof that does not match the group you claim.
• Starting construction before approval, which can put the assistance at risk. Ask your municipality first.
• Not keeping the Aadhaar-linked bank account active, which can delay the money.

Example

Ravi earns ₹5 lakh a year and wants to buy a ₹28 lakh flat with a bank loan. He falls in the LIG group, so he applies for the interest subsidy through his lender. The subsidy applies on the first ₹8 lakh of his loan, up to 12 years, and comes as up to ₹1.8 lakh over five years.

Frequently asked questions

Is there an application fee? Applying on the official channels is free.

I live in a rented house. Can I apply? The rules above turn on income, not owning a pucca house, and not having received a government house in the past 20 years. Whether your case qualifies is decided by your municipality, so ask them or check on the portal.

Is the scheme for villages too? No. This guide covers the urban scheme. For villages, ask your gram panchayat about PMAY-Gramin.

How long is the scheme valid? Five years from 1 September 2024.

I do not have a bank account yet. You will need an Aadhaar-linked account for payments. Our guide on opening a Jan Dhan account shows how.

Sources

• Business Today: PMAY-U 2.0 explained

The guide is based on a news summary of the scheme guidelines. Rules, limits and the portal process can change; please confirm on the official PMAY-U 2.0 portal or with your municipality before applying.