PMAY’s Mumbai Housing Gap Widens: 10,000–15,000 MHADA Homes Await Allotment

MUMBAI: The challenge facing affordable housing in Mumbai is no longer limited to constructing homes. The bigger hurdle is ensuring that eligible families can actually finance and occupy them. High land costs, limited access to bank credit and irregular incomes have left thousands of MHADA-built homes awaiting allotment.

MHADA has constructed nearly 50,000 homes across the Mumbai Metropolitan Region (MMR) under its housing initiatives. However, between 10,000 and 15,000 units remain unallocated because prospective beneficiaries have been unable to arrange financing, MHADA CEO Sanjeev Jaiswal said at the BRICS Friendship Cities conclave.

“MHADA has constructed close to 50,000 homes in the larger MMR area, but 10-15,000 of these homes we are not able to allocate because individuals were not able to secure funding from banks,” Jaiswal said during a session on housing.

Subsidy meets a financing gap

Under PMAY, eligible beneficiaries receive a subsidy of Rs 2.5 lakh. Yet the assistance does not fully resolve the affordability challenge, particularly for homes costing between Rs 12 lakh and Rs 15 lakh.

“PMAY provides a subsidy of Rs 2.5 lakh and if the houses constructed in Titwala, Kalyan etc cost anywhere between Rs 12 lakh and Rs 15 lakh,” Jaiswal said, adding that the remaining amount often becomes difficult for beneficiaries to finance.

For many low-income households, the difficulty begins with obtaining a formal housing loan. A large section of potential beneficiaries works in informal or irregular employment, making it harder to demonstrate stable monthly income, documented earnings and the credit profile required by banks. Poor CIBIL scores can further restrict access to formal financing.

Mumbai’s land-cost challenge

The financing problem is intensified by Mumbai and MMR’s high land values. Even where government support is available, elevated housing costs can push the final price beyond the borrowing capacity of intended beneficiaries.

The issue highlights a crucial gap in affordable housing policy: building a home does not automatically make it financially accessible. Without easier credit and financing mechanisms for households with irregular incomes, completed homes can remain vacant despite strong demand.

Across Maharashtra, around 3 lakh homes have been constructed under the PMAY scheme. The experience in MMR, however, underlines the need to address the financing side alongside construction if affordable housing is to reach the people it is intended for.

By Sana khan
Executive Editor,
Realty Quarter
Mumbai