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Introduction

Pradhan Mantri Awas Yojana is a flagship scheme from the Government of India and is operated under the Ministry of Housing and Urban Affairs. This scheme has been launched with the primary motto of ‘Housing For All’. It was launched in the year 2015 and works towards ensuring a pucca house for all eligible urban households by the year 2022, when India celebrates its 75th year of Independence.

There are numerous schemes under this programme, one of them being the CLSS – Credit Linked Subsidy Scheme. This scheme offers an interest subsidy of 3 to 6.5% on home loans taken by EWS (Economically Weaker Section)/LIG(Lower Income Groups)/ MIG (Middle Income Groups) applicants for acquisition, construction and upgradation of their homes.

This CLSS scheme, which was initially valid till March 2020 has been extended till March 2021. This enables more consumers to take advantage of this scheme.

Key Features of PMAY – CLSS Scheme

  • Get interest subvention of 3 - 6.5% interest subsidy on home loans of up to Rs. 12 Lakhs for a MIG II house
  • Scheme available under EWS, LIG, MIG I & MIG II categories to cater to a wide range of customer segment
  • Upfront deduction of the interest subsidy results in reduced EMIs for the applicant
  • Scheme can be availed through all major public sector and private sector banks
  • Interest subsidy available for first house purchased on the applicant’s name only
  • The beneficiary or any of his family members should not own a Pucca house in any part of the country.

Snapshot of the PMAY – CLSS Scheme

EWS

LIG

MIG I

MIG II

Scheme Duration

June 2015 – March 2022

January 2017 to March 2021

Dwelling Unit Carpet Area in Sq. M

30

60

160

200

Interest Subsidy (% p.a)

6.5%

4.0%

3.0%

Maximum Loan Tenure

For loans taken between June 2015 – December 2016 – 15 years

Not Applicable

From January 2017 onwards – 20 years

Eligible Housing Loan Amount for Interest Subsidy (Rs.)

6 Lakhs

9 Lakhs

12 Lakhs

Discounted Rate for Net Value Calculation

9%

Upfront amount of subsidy for a 20 year loan (Rs.)

2,67,280/-

2,35,068/-

2,30,156/-

Savings in Monthly EMI Amount (Rs.) Approx. at a Loan Interest Rate of 10%

2,500/-

2,250/-

2,200/-

Total Savings (Rs.) Approx.

6,00,000/-

5,40,000/-

5,28,000/-

Credit Linked Subsidy Scheme for EWS/LIG

Beneficiaries of the Economically Weaker Section (EWS) and Low Income Group (LIG) securing home loans from Banks, Housing Finance Companies and other similar institutions will be eligible for interest subsidy at a rate of 6.5 % for a 20-year term or for the loan period, whichever is lower.

The scheme is applicable only for loan amounts of up to Rs.6 lakhs. Amount over and above Rs.6 lakhs will be charged interest at a non-subsidized rate only. The interest subsidy shall be applied on home loans availed for new construction of a residential house or for addition of rooms, kitchen, toilet etc. to an existing house as incremental housing.

The carpet area of houses being constructed under this segment should be up to 30 square metres and 60 square metres for EWS and LIG respectively, in order to be eligible for the credit linked subsidy. The beneficiary may, however, build a house with a larger carpet area, but the subsidy will be offered only for an amount of Rs.6 lakhs.

Credit Linked Subsidy Scheme for MIG

Following the reception for the EWS/LIG CLSS Scheme, the Government launched the scheme for the MIG (Middle Income Groups) segment as well. This scheme is split between MIG I & MIG II, based on the income per annum. MIG I covers Rs.6,00,001 to Rs.12,00,000 and for MIG II it is Rs.12,00,001 to Rs.18,00,000 per annum. MIG I gets an interest subsidy of 4% on loans of up to Rs.9 lakhs. MIG II gets an interest subsidy of 6% on loan amounts of up to Rs. 12 lakhs. Any home loan amount above Rs.9 lakhs and Rs.12 lakhs would be at a non-subsidized rate.

The carpet area of houses being constructed under this segment should be up to 90 square metres and 110 square metres for MIG I and MIG II respectively, in order to be eligible for the credit linked subsidy.

PMAY – CLSS Scheme Eligibility Criteria

Here are the basic eligibility criteria to avail benefits under the scheme: 

The applicant or any family member of the applicant shall not own a house in any part of the country.

Either a single or a joint ownership deal is allowed in the case of a married couple, but they will receive only one subsidy.

The applicant or any family members of the applicant must not have benefited from any housing-related schemes offered by the Government of India.

Section 

Annual Family Income

Maximum carpet area on which subsidy shall be calculated

EWS

Rs.3 lakh

60 square meters (645.83 square feet)

LIG

Rs.6 lakh

60 square meters (645.83 square feet)

MIG1

Rs.6 lakh to Rs.12 lakh

160 square meters (1722.33 square feet)

MIG2

Rs.12 lakh to Rs.18 lakh

200 square meters (2152.78 square feet)

How to apply for subsidy under the PMAY – CLSS scheme?

The PMAY interest subsidy can be availed when you apply for a home loan from a lending institution. This scheme is available in public sector or private sector banks and even NBFCs offering home loans.

Under the scheme, there will be no processing fee for the amount of qualifying home loans as per income requirements. For additional loan sums above the qualifying loan amount, the usual processing fee can be paid to interest subsidy borrowers.

FAQs

1. Can I take advantage of the PMAY-CLSS scheme for adding a bedroom to my current house?

Yes, the scheme can be used for extension of the current house within the specified limits.

2. Till what date can I avail benefits under this scheme?

The scheme was originally slated for until March 31st, 2020. However, it has not been extended till March 31st, 2021.

3. What is the maximum loan amount for which I can get interest subvention under the scheme?

The scheme covers the EWS, LIG, MIG I & MIG II groups. The maximum loan amount covered under the scheme is Rs.12 lakhs.

4. Who processes the interest subsidy?

The interest subsidy is processed and issued to the applicant through the bank or NBFC where the loan is applied.

End Note

In Budget 2017, affordable housing was given infrastructure status which should help developers take advantage of its associated benefits. But to a common man, the house's timely delivery is still a distant dream. The builders had to complete the affordable housing projects in 3 years to take advantage of the benefits but now (Budget 2017) they have to complete them in 5 years. Users should analyse and evaluate all available options to make the right decision.

Latest & Update Pradhan Mantri Awas Yojana News

Approval for Construction of 3.61 Lakh Houses Granted under PMAY-U 25 Jun 2021

The Central Government has announced that it has approved the construction of 3.61 lakh houses under the PMAY-U (Pradhan Mantri Awas Yojana – Urban) scheme. With this, the total number of houses sanctioned under this scheme stands at 112.4 lakhs. The...

Read more

The Central Government has announced that it has approved the construction of 3.61 lakh houses under the PMAY-U (Pradhan Mantri Awas Yojana – Urban) scheme. With this, the total number of houses sanctioned under this scheme stands at 112.4 lakhs. The Ministry of Housing and Urban Affairs also announced that the total investment for the PMAY-U scheme is Rs. 7.35 lakh crores, of which Rs. 96,067 crores have been sanctioned and disbursed.

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