Rapid urbanization and the lack of planned affordable housing in India have led to a shortage of 10–12 million urban homes and 26–37 million urban households residing in informal housing, often in poor living conditions. The bulk of these households are low-income Economically Weaker Section (EWS) households, with annual incomes below ₹3 lakhs ($4,600), and Low Income Group (LIG) households with annual incomes of ₹3 lakhs to ₹6 lakhs ($4,600–$9,200). The government recognizes the need for new low-income housing and has set up the Pradhan Mantri Awas Yojana (PMAY), a scheme that aims to facilitate the provision of 20 million houses in urban India with financial assistance from the central government. While a section of low-income households (e.g., the lower end of EWS) cannot afford to buy a privately constructed home or improve their homes without significant help from the government, a large number of the upper end of EWS and LIG households can afford a home/home improvement without subsidies or with small subsidies (as provided by PMAY). However, most of these households need a housing loan to do so. The bulk of low-income households work in the informal sector and do not possess reliable documentation of income. These households therefore cannot obtain housing loans from banks and traditional housing finance companies, which focus on middle- and high-income formal sector customers and provide loans on the basis of reliable income documentation. A new group of “Affordable Housing Finance Companies” (AHFCs) is now addressing this gap and serving low-income, urban informal customers using an innovation pioneered in India. Sixty-two percent of the new housing being financed is “self-constructed,” standalone houses. Self-constructed homes are typically located on the outskirts of large cities and tier 2 and 3 towns. This type of standalone housing has always been popular in India as customers prefer a house where they have the option of expanding the structure. But instead of saving for years to buy land and then again saving for years to construct the house, households now save to buy the land and then use a loan to construct the house. However, since it requires significant equity to purchase land (which AHFCs typically do not finance) this type of housing is more accessible to the higher end of low-income households.