Chairing a high-level meeting to assess the work done so far, both in the rural and the urban areas, he stressed the need for all official agencies concerned to adopt a flexible approach.
He said the approach should take into account local conditions such as building material, habits and lifestyles, a PMO statement said.
"A tribal may prefer a house made from traditional local materials rather than bricks and mortar; and therefore, should be facilitated accordingly," the Prime Minister said.
He said "all common facilities, and required connectivity should also be conceived and delivered, along with housing - so that we move towards the concept of 'samasya-mukt gram' (problem-free village)."
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For urban areas, Modi suggested that solid waste can be used to make bricks, which would be useful as building material, the statement said.
He said all newly-constructed houses should take into account the required norms in disaster-prone areas.
Urban Development Minister Venkaiah Naidu, Rural Development Minister Chaudhary Birender Singh and senior officers from the ministries of HUPA, Rural Development, NITI Aayog and PMO were present at the meeting.