Today if you have a stable job and regular income, there are scores of banks willing to help you finance your dream home. However, that is not the case if you are in the low income group and not having a stable job in the organized segment.
Even with a positive repayment intent, the banks would worry about income levels and the ability to service the loan. Here when we look at the SBI home loan products, we specifically look at how the people can available low income home loans, with specific government supported schemes to help boost home ownership among the lower income groups.
Today most of the banks do give such loans as part of their priority sector commitments. However, what is important here is to note that there are several dedicated schemes to ensure that the home loans also reach out to the less privileged sections of society.
Here is how it works. We will specifically focus on SBI home loan as a product and low income home loans for the less privileged sections at the bottom of the social pyramid.
Rajiv Gandhi Awas Yojana
The Rajiv Gandhi Awas Yojana is another scheme which was launched by the central government. It is intended to make the country free of slums and kuccha houses and shift these people to pucca houses; which are safer and more secure. The basic civic infrastructure will also be provided in such cases. Under the Rajiv Gandhi Awas Yojana, individuals from the Economically Weaker Section (EWS) or Low Income Group (LIG) can receive financial aid of up to Rs7.50 lakh for housing units in the size of 21 square metres (SQM) to 40 square metres (SQM). There are 3 levels of eligibility under this low income home funding scheme and can be captured as under.
- Category A – This covers individuals living in urban areas with a population of over five lakhs and they are eligible to receive a maximum of Rs5 lakhs as home loan.
- Category B – Covers those individuals living in urban areas with a population under five lakhs and in such cases they are eligible to receive a maximum of Rs4 lakhs loan.
- Category C – This is specifically applicable to persons living in the special category states and North-Eastern and such persons are eligible to receive a fixed amount of Rs5 lakhs towards their home loan.
Loans from Microfinance Institutions and SFBs
The SFBs (small finance banks) and the micro finance institutions (MFIs) actually specialize in giving loans to the segment of society that are not in the banking ambit. However, many of these MFIs and SBFs only give loans against existing collateral. Since gold holdings are quite popular among the rural and semi-urban population in India, many of these MFIs and SFBs provide home loans against the security of gold, land parcels, agricultural land etc. Home loans from SFBs and MFIs is normally restricted to secured lending only.
If you are in the low income group, there are still home loan options available to you. For example, MFI loans may become tough due to security needs, but you can also go for an SBI home loan given under the PMAY. These are specifically designed as low income home loans across rural, semi-urban and even urban areas.