PMAY Urban 2.0 Bangalore Eligibility: 2026 Subsidy Rules

The catch in Bangalore is the ₹35 lakh price cap, not the income test. Below: the exact rules from the scheme guidelines, how to apply, a worked example, and which homes in the city can realistically qualify.

What is PMAY-Urban 2.0?

The Union Cabinet approved PMAY-U 2.0 on 9 August 2024 to support 1 crore urban homes over five years, with ₹2.30 lakh crore of government assistance. The Prime Minister launched it with its operational guidelines on 17 September 2024, and the guidelines say the mission runs for five years from 1 September 2024.

It has four parts: Beneficiary-Led Construction (help to build on your own land), Affordable Housing in Partnership (help to buy in approved affordable projects), Affordable Rental Housing, and the Interest Subsidy Scheme (ISS). For a salaried Bangalore family buying a flat with a bank loan, the ISS is the relevant part. Unlike the other parts, the ISS is a Central Sector Scheme, run by the Centre through banks and housing finance companies.

Who is eligible for PMAY Urban 2.0 in Bangalore?

• Income: EWS up to ₹3 lakh a year, LIG ₹3 lakh to ₹6 lakh, MIG ₹6 lakh to ₹9 lakh. All three get the same ISS terms. Income is the household's, proven by self-certificate or affidavit.
• Family: husband, wife, and unmarried sons and daughters. If two or more family members borrow on the same property, they are treated as one family for income.
• No pucca house: no family member may own a pucca (all-weather) house anywhere in India.
• No earlier benefit: anyone allotted a house under a central, state or local government housing scheme in the last 20 years is not eligible.
• Ownership: the house must be in the name of the female head of the household or jointly with her husband. Only where there is no adult woman in the family can it be in a man's name alone; widowers, unmarried or separated persons and transgender applicants can hold it individually.
• Location: statutory towns and notified planning or development areas are covered, which takes in Bengaluru's urban area.

What are the loan, price and size limits?

• Loan: up to ₹25 lakh. Subsidy is calculated only on the first ₹8 lakh.
• House value: up to ₹35 lakh. If the property value or family income assessed by the lender at sanction is above the limit, the loan is not eligible.
• Carpet area: up to 120 sq m.
• Subsidy: 4% a year for a tenure of up to 12 years, with a maximum release of ₹1.80 lakh (net present value up to ₹1.50 lakh at an 8.5% discount rate). Loan tenure must be more than five years.
• Timing: loans sanctioned and disbursed on or after 1 September 2024, for purchase, re-purchase or construction.
• Release: five equal yearly instalments, credited to your loan account through the lender, only while the loan is active and more than 50% of the principal is outstanding.

What are the restrictions after you get the subsidy?

• Five-year lock-in: you cannot sell or transfer the house for five years from the first disbursement of the home loan.
• One subsidy per property: if you buy a home on which a previous owner took the subsidy, you cannot claim it again.
• Balance transfer: if you move your loan to another lender, you cannot claim the subsidy again; if you never claimed it with the first lender, you lose eligibility after the transfer.
• Geo-tagging: the lender or you must geo-tag the house. For an under-construction home, before each instalment; for a completed purchase, after the first instalment.
• False income declarations can lead to legal proceedings.

How do I apply for PMAY Urban 2.0?

• Step 1: check the five tests above: income, no pucca house, no benefit in 20 years, a woman owner or co-owner, and a home within ₹35 lakh and 120 sq m.
• Step 2: register your demand on the PMAY-U 2.0 Unified Web Portal (linked from pmay-urban.gov.in). You declare your house ownership status, any past housing benefit and your annual household income, and choose a lending institution. Aadhaar is used to avoid duplicate claims.
• Step 3: the portal generates an application ID and forwards it to the lender you chose, which does its due diligence and loan documentation.
• Step 4: after disbursement, the lender uploads the subsidy claim within 30 days through its Central Nodal Agency. If you are rejected, the guidelines say you should be told the reason.
• Step 5: the Ministry releases the subsidy instalments to the lender, which credits your loan. You get an SMS on your registered mobile for each credit.

Ask your bank branch whether it is registered as a lending institution under PMAY-U 2.0 before you apply; the guidelines require participating lenders to display the scheme details at their branches. Our home loan basics for the city are in Home Loan Guide for Bangalore Buyers (2026): Eligibility, LTV, Documents and EMI.

Worked example: ₹34 lakh flat, ₹8 lakh family income

A couple earning ₹8 lakh a year together (MIG) buys a ₹34 lakh flat in the wife's name, jointly with the husband, with a ₹25 lakh loan at 8.00% for 20 years.

• EMI: about ₹20,910 a month, which is 31% of their gross monthly income of about ₹66,670, inside the range lenders accept.
• Subsidy: up to ₹1.80 lakh, in five yearly credits of about ₹36,000 each, reducing the principal.
• If the EMI stays the same, those credits cut the loan by about 30 months and save about ₹4.6 lakh of interest on our calculation. Some lenders may instead reduce the EMI.
• Down payment: ₹9 lakh. Stamp duty at 3% for a property between ₹20 lakh and ₹45 lakh (₹1.02 lakh) plus cess and surcharge, and 2% registration (₹68,000).
• GST if under construction: 1% for an affordable home (up to ₹45 lakh and 60 sq m carpet in metros), about ₹34,000; nil on a ready flat with an occupancy certificate.

Which Bangalore homes can qualify under ₹35 lakh?

This is where most Bangalore buyers fall out. ANAROCK's Q2 2026 average quoted base price for Bengaluru is ₹9,450 per sq ft, and its lowest key micro-market, Electronic City, is ₹7,450. At those base rates ₹35 lakh buys roughly 370 to 470 sq ft of super built-up area before parking and other charges. In practice that means a compact 1 BHK, usually on the city edge, a smaller resale flat, or construction on a plot you already own.

• New projects on the periphery: a few listings start under ₹35 lakh. On our site, Casagrand Aquene in Kengeri shows a starting price of ₹22.57 lakh (Casagrand Aquene Kengeri). Whether a specific unit qualifies depends on its final agreement value, carpet area and your lender's assessment, not the headline price.
• Budget collections: start with Under 75 Lakh, Bangalore and filter for units at or below ₹35 lakh all-in.
• Fringe localities with lower base rates: Kengeri, Bangalore and Electronic City, Bangalore.
• Building your own home: the ISS also covers construction. You need an approved layout plan unless the state exempts small houses through deemed or pre-approved plans.

Watch the 'house value' carefully. Builders often quote a base price that excludes car parking, club membership and other charges. If the agreement value crosses ₹35 lakh, the loan is not eligible, so ask for the all-in agreement value before you book. For the difference between carpet and super built-up area, see Carpet, Built-Up and Super Built-Up Area: A Worked Example for Bengaluru Buyers.

Common reasons PMAY applications fail

• A family member already owns a pucca house, even in another city or village.
• Household income at sanction is above ₹9 lakh once both spouses' incomes are counted.
• Agreement value above ₹35 lakh, or carpet area above 120 sq m.
• Loan sanctioned or disbursed before 1 September 2024.
• No woman named as owner or co-owner when there is an adult woman in the family.
• The loan was moved to another lender before the claim, or more than half the principal has already been repaid.