According to a government statement, the policy will outline detailed guidelines for operating both components in the state during 2026, in line with directions issued by the Government of India.
The policy focuses on driving affordable housing supply by incentivising developers and reducing the cost of homeownership through financial assistance. With this officially rolling out, let’s understand what the key features of the new Affordable Housing Policy are and what it means for buyers and the real estate sector.
Affordable Housing Policy: Key features
The new Affordable Housing Policy will include two major components
- Affordable Housing in Partnership (AHP)- This encourages developers to build affordable homes in collaboration with the government. In return the policy introduces several developer incentives, which include exemptions from land-use change charges, waivers of map approval fees, and relief from external development charges.
- Affordable Rental Housing (ARH)- This focus on increasing the availability of affordable rental homes for low-income groups such as the urban poor, working women, and industrial workers. Public and private agencies will collaborate to build, manage, and maintain these rental homes, addressing the growing housing needs of the urban poor.
New Law to Prevent Property Fraud
To tackle fake property sales and fraudulent registrations, the cabinet also approved amendments to the Registration Act. The amendment will introduce three new sections – 22A, 22B and 35A for strengthening property verification during registration. Under the new provisions:
- Property cannot be registered without verifying ownership documents.
- The sub-registrar must confirm the identity of the seller.
- Documents related to legal possession and transfer rights must be submitted.
If the required documents are missing, the sub-registrar will have the authority to refuse registration. This amendment was necessary as cases where fake properties were sold were rising.
One-Time Settlement Scheme for Property Defaulters
The cabinet also approved the One-Time Settlement (OTS) Scheme 2026 for defaulters of properties under development authorities, the UP Housing and Development Council, and other special area development authorities. Under the scheme:
- Only simple interest will be charged
- Penalty interest will be fully waived
The scheme will remain open for three months. According to the state government 18,982 property default cases are pending with development authorities and around ₹11,848.21 crore in dues remains unpaid. In 545 map approval cases, another ₹1,482.10 crore is outstanding. The scheme aims to help defaulters clear dues while enabling authorities to recover large pending amounts. Payment under OTS will be allowed in instalments depending on the total payable amount.
Real Estate Impact
It goes without saying that the cabinet’s decisions could have significant implications for Uttar Pradesh’s housing market supporting property prices.
- The affordable housing policy may boost housing supply for middle and lower income groups while encouraging private developers to participate through incentives.
- The new township scheme is expected to promote planned urban expansion in tier-2 and tier-3 cities, potentially increasing land demand and real estate development in these areas.
- Meanwhile, the stricter property registration rules could increase transparency in property transactions and reduce the risk of fraud, which may strengthen buyer confidence in the state’s real estate market.
- Finally, the OTS scheme could unlock thousands of stalled property cases by allowing defaulters to settle dues, helping development authorities recover large pending funds.
Benefits for homebuyers
The new Affordable Housing Policy is a big step toward making homeownership more accessible for middle and low-income families in Uttar Pradesh. Eligible buyers under the scheme will receive financial assistance of up to Rs 2.5 lakh, including:
- Rs 1.5 lakh from the central government
- Rs 1 lakh from the Uttar Pradesh government
This will help in lower the upfront costs, making it easier for families to own homes. Plus, stamp duty relaxations will further reduce the overall cost of buying a property.
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