PMAY-Urban 2.0 is the Central Government’s housing scheme for urban families from the economically weaker section (EWS), low income group (LIG) and middle income group (MIG) who do not own a pucca house anywhere in India. For home buyers, the most relevant part is the Interest Subsidy Scheme (ISS): an interest subsidy of up to ₹1.80 lakh on a home loan of up to ₹25 lakh for a house costing up to ₹35 lakh, for households earning up to ₹9 lakh a year. If your income and budget fit these limits, check eligibility before you book.
Key takeaways
- Household income must be up to ₹9 lakh a year (EWS up to ₹3 lakh, LIG ₹3 lakh to ₹6 lakh, MIG ₹6 lakh to ₹9 lakh).
- No member of the family can own a pucca house anywhere in India.
- The ISS gives 4% subsidy on the first ₹8 lakh of the loan, up to ₹1.80 lakh, released in five yearly instalments.
- Home loan up to ₹25 lakh, house value up to ₹35 lakh and carpet area up to 120 sq m.
What PMAY-Urban 2.0 is
The Union Cabinet approved PMAY-Urban 2.0 on 9 August 2024 to support one crore urban households in building, buying or renting a house over five years. It has four parts, called verticals:
| Vertical | Who it is for | What it offers |
|---|---|---|
| Beneficiary Led Construction (BLC) | EWS families who own a plot | Financial assistance to build a new house on their own land |
| Affordable Housing in Partnership (AHP) | EWS families | Houses built by public agencies or private developers with government support |
| Affordable Rental Housing (ARH) | Urban migrants, workers and others who do not want to buy | Rental housing |
| Interest Subsidy Scheme (ISS) | EWS, LIG and MIG families taking a home loan | Interest subsidy on the home loan |
Most buyers looking at private flats, houses or plots with construction in and around Coimbatore will be interested in the ISS, so the rest of this guide focuses on it.
Who qualifies for the Interest Subsidy Scheme
Income
| Category | Annual household income |
|---|---|
| EWS | Up to ₹3 lakh |
| LIG | Above ₹3 lakh up to ₹6 lakh |
| MIG | Above ₹6 lakh up to ₹9 lakh |
Family and ownership
- A beneficiary family means husband, wife, and unmarried sons and daughters. Separate rules allow unmarried, widowed or separated earners to apply.
- Neither you nor any family member should own a pucca (all-weather) house anywhere in India.
- You should not have availed a central or state housing scheme benefit in the preceding period set by the guidelines.
- The house is expected to be in the name of the female head of the family, or jointly with her, unless there is no adult female member.
- Aadhaar is needed for each family member for verification.
Property and loan
- Home loan up to ₹25 lakh.
- Value of the house up to ₹35 lakh.
- Carpet area up to 120 sq m.
- Loan sanctioned or disbursed on or after 1 September 2024.
- The house should be in an eligible urban area, which includes statutory towns as per Census 2011 and notified planning areas. Check whether your chosen location qualifies with your lender.
How the subsidy works
The subsidy is 4% a year on the first ₹8 lakh of the loan, calculated for a tenure of up to 12 years, and capped at ₹1.80 lakh per beneficiary. The loan tenure should be more than five years. It is paid by the Central Government through the lender (called a Primary Lending Institution) into your loan account, in five yearly instalments. Some instalments are linked to conditions such as geo-tagging of the house, so keep in touch with your lender.
The subsidy reduces your outstanding principal, which lowers your future interest. It does not reduce your down payment, stamp duty or registration charges, so plan those separately. Our guide to the total cost of buying property lists what to budget.
Because the subsidy applies only to the first ₹8 lakh, the benefit is the same whether your loan is ₹10 lakh or ₹25 lakh, as long as you meet the other limits.
How to apply
- Check eligibility on the PMAY-U 2.0 unified web portal and register as a beneficiary using Aadhaar.
- Choose a participating lender. Banks, housing finance companies and other lending institutions that have signed up with the central nodal agencies can process ISS claims.
- Submit documents: KYC, income proof, property documents and a self-declaration that your family does not own a pucca house. See our home loan documents checklist.
- Get the loan sanctioned. The lender verifies eligibility and submits the subsidy claim.
- Track instalments on the portal and your loan statement.
What Coimbatore buyers should check
- Budget fit. With a ₹35 lakh cap on house value, eligible options are typically compact flats or modest independent houses, often in growing suburbs. Look at flats and apartments within the cap and confirm the agreement value, including any separate charges, stays within ₹35 lakh.
- Carpet area. 120 sq m is roughly 1,290 sq ft of carpet area. Builders often quote super built-up area, so ask for the carpet area in writing.
- Approvals. Lenders will fund only properties with clear title and approvals, and the scheme requires the property to be in an eligible area.
- Ownership structure. The scheme’s preference for women’s ownership fits well with Tamil Nadu’s registration fee concession for women on properties up to ₹10 lakh. See buying property in a woman’s name.
Scheme rules can be revised, so read the latest guidelines on the official portal and ask your lender for its PMAY-U 2.0 checklist before you pay an advance.
Frequently asked questions
What is the maximum PMAY-Urban 2.0 subsidy?
Under the Interest Subsidy Scheme, the maximum is ₹1.80 lakh per beneficiary: 4% interest subsidy on the first ₹8 lakh of the loan, for up to 12 years, paid in five yearly instalments.
Can I get PMAY-U 2.0 if I already own a house?
No. The scheme is for families where no member owns a pucca house anywhere in India.
Is PMAY available for a ₹40 lakh flat?
Not under the Interest Subsidy Scheme. The house value must be up to ₹35 lakh and the loan up to ₹25 lakh.
Does the subsidy cover stamp duty or the down payment?
No. The subsidy is credited to your home loan account and reduces the outstanding principal. Down payment, stamp duty and registration charges are paid by you.
This article is general information as of September 2026, not legal, tax or financial advice. Rules and rates change; confirm with a qualified advocate, chartered accountant or the relevant department before you act.
References
- PIB: Cabinet approves Pradhan Mantri Awas Yojana-Urban 2.0
- PMAY-U 2.0: Interest Subsidy Scheme (ISS)
- Indian Bank: ISS under PMAY-U 2.0
Looking for a home within the PMAY-U 2.0 limits?
Tell us your budget and preferred area in Coimbatore, and our team will help you find approved homes that fit the scheme’s value and carpet area caps.
