ATM :: Are you aware of ‘Right to Housing’?

Sep 30, 2014, 05:51PM IST | Surbhi Gupta | Bureau
United Nations’ Declaration of Human Rights identifies ‘Right to Housing’ in one of its articles. It also states ‘Right to a standard of living’ which includes social services and other basic necessities. However, rising property prices has become a bottleneck for lower income segments to own a property without pressurising their pockets.

Hence, to motivate buyers and increase home ownership among the masses, Rajiv Rinn Yojna (RRY) came into effect, a revamped version of the Interest Subsidy scheme for Housing the Urban Poor (ISHUP).

Dr M Ravi Kanth, chairman & managing director, HUDCO says, “There are over 60 housing finance companies operational offering subsidised home loans. Lack of awareness among the masses is a major holdback for us.”

According to RRY, if you are earning upto Rs 2 lakh per annum, you are eligible to benefit under this scheme. The maximum loan amount admissible is Rs 8 lakh. Subsidy will be given for loan amount upto Rs 5 lakh only.

How RRY helps you?
RRY provides interest subsidy of 5 per cent on home loans to construct new houses or expand the existing ones. Borrowers have the freedom to choose fixed or floating rates as per their convenience. Annual interest subsidy will be given to the lending agencies or housing finance companies. Thereon, it will be passed on to the borrower in the form of reduced EMIs. The loan tenure can be between 15-20 years.

What RRY covers?
RRY covers building or purchasing a new home with a minimum carpet area of 28 sq meters. This scheme will also benefit those who want to expand their existing homes or want to construct a new home on a plot, already owned by them.

Priority to women
According to the guidelines published by the ministry, lenders need to give preference to female applicants (subject to beneficiaries being from EWS/LIG segments). This is basically to promote property ownership among women. No extra subsidy is provided so far for female borrowers.

The ceiling of this interest subsidy scheme is limited to Rs 5 lakh which can extend up to Rs 8 lakh. Owning a home under this budget is a distant dream in urban centres like Mumbai or Delhi. Hence, to promote home ownership on a wide scale, government needs to rethink on its set margin.

Surbhi Gupta is a real estate correspondent in Magicbricks’ editorial team with the flair of analysing the industry trends and scenario.

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