News- Guarantee cover for Pradhan Mantri Awas Yojana has been launched by IMGC – India Mortgage Guarantee Corporation. This is the first company that is providing Guarantee cover under Pradhan Mantri Awas Yojana to broaden the coverage of home loans with a lower level of risk on books of lenders. Pmay is a housing scheme in India to provide housing units through government criteria.
Guarantee cover for Pradhan Mantri Awas Yojana (PMAY)
Benefits under Guarantee cover for Pradhan Mantri Awas Yojana (PMAY) – The cover will allow home buyers under Prime Minister’s Housing scheme to extend the loan term up to 30 years , another benefit is it will allows a term extension of Seven years beyond retirement age also enable lenders to offer loans to customers till they achieve the age of 75 years in some cases.
Also check – How much money you can save under PMAY.
Amitava Mehra, CEO, IMGC said — “This offering will be a strong enabler in helping achieve the larger
vision of ‘Housing for All’ by 2022. Through this product, we will help bridge the demand gap in low income groups by increasing the credit flow,” .
A standardized program across lenders will be done to offer this cover scheme . The company currently has tie ups with two banks and four housing finance companies and has guaranteed over 10,000 retail loans across the country covering a cross section of borrowers.
The government has so far approved construction of over 16 lakh affordable houses under PMAY(Urban), with an investment of about Rs 90,000 crore, with a central assistance of about Rs 25,000 crore.
Mortgage guarantee, also known as mortgage insurance in some parts of the world, is a product which compensates banks and housing finance companies for losses that may arise when a home owner defaults on a home loan.
The product, if opted for with home loans, can help buyers increase affordability through a bigger loan.
NHB is the majority shareholder with 38% stake in IMGC, followed by US-based Genworth Financial with 36%. Asian Development Bank and International Finance Corporation have 13% stake each.