"Want to buy a house with low income? Discover low-income home loans, mortgage tips & smart ways to own your dream home even with a tight budget!"
Published: 17 March 2025
Updated: 17 March 2025
Attaining a specific age, owning a home becomes more than a wish. It becomes the base and necessity to proceed forward in life. It also discourages the wait to earn a high income to own a home. Thus, for all the individuals wishing to buy house with low income, there is hope for you. It is the home loans and government backed schemes. The loans may seem intimidating at first, but here we cover how they can be your friend in need. Have a glance to form an informed opinion about the options.
To help with how to buy a house with low income, here are insights into the popular and beneficial government backed programs:
It is the Government of India program that offers aid to low-income individuals who are looking to buy a house. It also gives preference to senior citizens and differently abled individuals. The scheme offers a home loan for you for 20 years at the rate of 6.5% per annum. However, the scheme includes a condition not to own a pukka house in the country. PMAY is divided into two subsections, Gramin and Urban.
PMAY Gramin: Here, financing options are available for the construction of pukka houses in rural areas of India. The SC/ST individuals and minority communities are prioritised, with eligibility expanding to landless and manual scavenger families.
PMAY Urban: It offers subsidies for home construction and renovation in urban areas under the Credit Linked Subsidy Scheme (CLSS). The different offerings depending on the income category include:
Economically Weaker Sections (EWS): A subsidy of up to INR 2.67 lakhs is provided for properties up to 30 square meters. It is for households with income up to INR 3 lakhs.
Low Income Groups (LIG): A subsidy of up to INR 2.67 lakhs is provided for properties up to 60 square meters. It is for households with income up to INR 6 lakhs.
Middle Income Groups (MIG): It is further divided into MIG-I and MIG-II.
MIG-I: A subsidy of up to INR 2.35 lakhs is provided for properties up to 160 square meters. It is for households with income up to INR 6-12 lakhs.
MIG-II: A subsidy of up to INR 2.3 lakhs is provided for properties up to 200 square meters. It is for households with income up to INR 12-18 lakhs.
It is the scheme from the central government towards the aim of creating a slum-free India. As per the scheme, the EWS or LIG individuals benefit from financial assistance of INR 7.5 lakhs for houses ranging from the size of 21 to 40 square meters. The Rajiv Awas Yojana also divides the individuals into three categories:
Category A: It encompasses individuals residing in urban areas with a population of over 5 lakhs. They are eligible for a maximum of INR 5 lakhs.
Category B: It encompasses individuals residing in urban areas with a population of over 5 lakhs. They are eligible for a maximum of INR 4 lakhs.
Category C: It encompasses individuals residing in special category states and North-Eastern states. They are eligible for a fixed amount of INR 5 lakhs.
This scheme benefits individuals residing in rural areas who can not benefit from PMAY. It offers assistance with house construction and repair. The beneficiaries benefitting from the scheme must follow the standard structural safety guidelines.
Proceeding further with how to buy a house with low income, there is easy availability of home loans for salaried individuals. However, the fear remains about managing the EMIs throughout the tenure. To guide you through this, here are tips for buying a home with loan at low income:
With the fixed monthly income and expenditures, understanding the amount you can set aside for EMIs is essential for better financial management. It helps set the budget for the loan tenure so that it does not impact the existing lifestyle. Further, enough savings for about six months must also be kept aside for emergency purposes.
Based on these and other factors, it is recommended to determine a realistic budget. It will also influence the principal amount to be taken on the loan. Hence, understand the overall financial transaction and accordingly set the loan amount and budget.
The interest charges are too high to pay. To ensure minimal expenditure on the same, work on your credit score. Enhancing the same exhibits you as a non-risky candidate and hence makes you eligible for the lower interest rate. So, check the current credit score and follow the tips to improve it.
Paying the lump sum amount beforehand lowers the balance for EMIs and, hence, the EMIs and tenure. Thus, savings can help reduce the expenditure and burden on your finances.
Even if the down payments are not made enough, aim for savings to submit as a foreclosure amount. However, you should know that foreclosure is associated with fees, and careful calculations and consideration are necessary before proceeding with the decision.
Be it low-income home loans or business based income, the loans are easily accessible. The key is efficient management that does not impact the existing finances. For individuals seeking home loan for low income, it is recommended to explore all the possible options. From government subsidies to the government and private home loans, check it all to have the best experience.
Ans: Low income home loans offer longer repayment periods and lower interest rates. On the other hand, mortgage loans come along with higher interest rates and EMIs.
Ans: Apart from the mentioned ones, personal loans, zero down payment home loans, secured loans, borrowing and employer loans are also possible options.
Ans: Yes, the government-backed FHA loans are specifically for first-time buyers with low incomes. It requires a 3.5% down payment and a 580 CIBIL score as eligibility criteria. A score of 500 with a 10% down payment is also eligible for FHA loans.
