NHB Flags Slow PMAY 2.0 Loan Disbursements

The issue was discussed in a meeting with chief executives of leading housing finance companies last week, where NHB officials said disbursals were falling short of internal targets. Lenders were asked to strengthen follow-through on sanctioned cases and focus more closely on on-ground implementation to accelerate progress under PMAY 2.0.

Government agencies have already shared details of more than 1.8 million potential beneficiaries with housing finance companies. These households meet the eligibility criteria under the scheme, but lenders indicated that conversion from beneficiary data to actual loan disbursement has remained limited so far.

Housing finance companies highlighted higher stress levels in the beneficiary-led construction segment, particularly for smaller loans. Loans below Rs 0.5 million have shown elevated bounce rates and early repayment stress, mirroring borrower profiles typically seen in the microfinance segment, which has faced pressure in recent quarters.

Lenders also pointed to structural constraints, noting that small-ticket PMAY loans involve disproportionately high operating, underwriting and monitoring costs. While such loans add limited scale to overall loan books, they require similar servicing effort as larger loans, constraining the pace at which PMAY 2.0 portfolios can be expanded.

Under PMAY 2.0, the maximum eligible home loan amount is capped at Rs 2.5 million, with borrowers entitled to an interest subsidy of Rs 0.18 million. The subsidy is disbursed in five equal annual instalments, replacing the earlier one-time subsidy of Rs 0.267 million offered under the previous version of the scheme.

The subsidy structure is uniform across Economically Weaker Section, Lower Income Group and Middle-Income Group categories. Annual urban income limits have been set at Rs 0.3 million for EWS, Rs 0.6 million for LIG and Rs 0.9 million for MIG beneficiaries.

NHB has indicated that disbursement trends under PMAY 2.0 will continue to be closely monitored and has urged lenders to address execution gaps as the scheme progresses.