PMAY-Urban 2.0 Interest Subsidy: Who Gets Up to ₹1.80 Lakh on a Home Loan

The PMAY-Urban 2.0 interest subsidy can reduce the cost of a first home loan by up to ₹1.80 lakh for families with income up to ₹9 lakh a year. If you are buying or building your first house in Dehradun, Haridwar, Haldwani, Rudrapur or any other urban area of Uttarakhand, it is worth checking before you choose a lender.

What is the Interest Subsidy Scheme (ISS)?

Pradhan Mantri Awas Yojana – Urban 2.0 is the central government's housing mission for urban areas. One of its parts is the Interest Subsidy Scheme, which pays part of the interest on home loans taken from banks and housing finance companies. It applies to home loans sanctioned and disbursed on or after 1 September 2024.

Who is eligible

The loan must be for buying, rebuying or constructing a house in an urban area, and the family must not already own a pucca house anywhere in India. Income is self-certified by an affidavit from the applicant.

How much is the subsidy?

• Loan amount: up to ₹25 lakh
• Property value: up to ₹35 lakh
• Carpet area: up to 120 square metres
• Subsidy: 4% interest subsidy on the first ₹8 lakh of the loan, for a tenure of up to 12 years
• Maximum benefit: up to ₹1.80 lakh, released in five yearly instalments

The subsidy is credited to your loan account and reduces the principal, which lowers your EMI or tenure. Your loan must be active and more than half of the principal must still be outstanding when each instalment is released.

Who is not eligible

• Loans above ₹25 lakh, or homes valued above ₹35 lakh
• Households with income above ₹9 lakh
• A property that has already received the subsidy, even if you buy it from the original owner
• Families that already own a pucca house

How to claim it

1. Check eligibility on income, property value, loan amount and carpet area.
2. Choose a participating lender. Most banks and housing finance companies participate; ask the lender before you apply.
3. Register your demand on the PMAY-U 2.0 unified web portal, with Aadhaar.
4. Apply for the home loan and give the lender your income affidavit.
5. Geo-tagging: the house is geo-tagged. For a ready house this happens after the first instalment; for construction, before each instalment.

A worked example

A family in Dehradun with income of ₹7.5 lakh a year buys a ₹32 lakh flat with a ₹24 lakh loan for 20 years. They qualify as MIG. The subsidy is calculated on the first ₹8 lakh of the loan at 4% for up to 12 years, and the benefit released is capped at ₹1.80 lakh over five years. Use the EMI calculator on our home loan page to see how the lower principal changes your EMI.

Common mistakes

• Signing for a property above ₹35 lakh and assuming a higher down payment keeps you eligible. The property value cap still applies.
• Switching lenders by balance transfer before the subsidy is claimed.
• Skipping the portal registration and expecting the bank to do everything.

Not sure which documents you need? See our home loan documents checklist.

Buying your first home in Uttarakhand? We check whether you qualify for PMAY-U 2.0, shortlist participating lenders and help you file correctly. Share your income, budget and district on WhatsApp or through the form on this page.

Source: PMAY-U 2.0 Interest Subsidy Scheme, Ministry of Housing and Urban Affairs (pmaymis.gov.in). Scheme terms can change; confirm with your lender.