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Introduction
The primary objective of the Pradhan Mantri Awas Yojana (PMAY) is to provide affordable housing facilities to the citizens across the country. With the theme of ‘Housing for All by 2022’, the PMAY has proposed to construct 20 million houses to cater to the needs of the financially weaker section of the country. The houses constructed under the PMAY scheme will have all the basic facilities such as electricity, water supply, proper sewage system, sanitation facility, etc.
In order to enable more people realize their dream of owning a property, the Government has introduced the Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY).
This PMAY Credit Linked Subsidy Scheme can also be called as the interest subsidy scheme. This CLSS scheme is focused to provide subsidy on home loan interest rate for people who belong to the Economical Weaker Section (EWS), Lower Income Group (LIG) and Middle Income Group (MIG).
Let’s understand some of the features of Credit-Linked Subsidy Scheme (CLSS) for EWS, LIG and MIG categories in a tabular format:
CLSS for LIG (Lower Income Group) and EWS (Economically Weaker Section)
| Category | Lower Income Group | Economically Weaker Section |
|---|---|---|
| Annual household income | Between Rs. 3 Lakhs – Rs. 6 Lakhs | Rs. 3 Lakhs |
| Carpet area of the dwelling unit | 60 Sq. Mtr. | 30 Sq. Mtr. |
| Rate of interest subsidy | 6.50% | 6.50% |
| Maximum loan amount | Rs. 6 Lakhs | Rs. 6 Lakhs |
| Maximum loan tenure | 20 years | 20 years |
CLSS for MIG (Middle Income Group)
| Category | Middle Income Group- 1 | Middle Income Group-2 |
|---|---|---|
| Annual household income | Between Rs. 6 Lakhs – Rs. 12 Lakhs | Between Rs. 12 Lakhs – Rs. 18 Lakhs |
| Carpet area of the dwelling unit | 160 Sq. Mtr. | 200 Sq. Mtr. |
| Rate of interest subsidy | 4% | 3% |
| Maximum loan amount | Rs. 9 Lakhs | Rs. 12 Lakhs |
| Maximum loan tenure | 20 years | 20 years |
Eligibility criteria for Credit Linked Subsidy
- It is to be noted that the applicants are eligible for PMAY CLSS scheme only if they do not have a house registered under their own name or under the name of any member of their family members.
- Also, if any family member of the applicant has already availed central assistance from the Government of India under any housing scheme before, they won’t be eligible to benefit from this scheme.
- In the case of married couples, either of the spouse or both together in joint ownership will qualify for a single subsidy.
- Credit linked subsidy is applicable for housing loans used for new construction or for the expansion of an already existing property.
Application process and processing fee for CLSS
- The eligible beneficiaries under CLSS LIG/EWS/MIG can directly apply for a housing loan with the lending institutions.
- Post the verification of the application, the lending institutions will sanction the home loan and afterward claim the subsidy from Central Nodal Agencies (CNAs).
- This subsidy amount will be credited to the beneficiaries account by the lending institution. This will lower the total loan amount.
- The beneficiaries can continue paying the EMIs towards the balance loan amount.
- Another major advantage is that there will be no processing fee charged by PLIs for the applicants applying under CLSS.
To extend the reach of the CLSS scheme, NBFCs and other small finance banks have been recognized to function as Primary Lending Institution (PILs). Moreover, institutions like state and urban cooperative banks, housing finance companies, regional rural banks, and scheduled commercial banks are also recognized to function as PILs.
To sum it up, the CLSS scheme is a great initiative under Pradhan Mantri Awas Yojana, as it promises housing for all, by the end of 2022. CLSS offers attractive schemes to financially deprived individuals to help them realize their dream of purchasing their own property.
It is recommended that beneficiaries under the PMAY scheme should avail a home loan after comparing various loan offers provided by different financial institutions. This will help them avail a home loan that best suits their needs.
Moreover, it is also advisable to calculate the monthly installments of the home loan beforehand with the help of an online housing loan EMI calculator. This can help the borrowers plan their monthly budget wisely and make timely repayment on their home loan.
The Bajaj Finserv Home Loan offers competitive interest rates and other lucrative features such as flexible repayment options, no hidden charges, etc. You can now download and install our home loan app for an easy online application process, minimal documentation and best home loan interest rates among other added advantages.
Lastly, do not forget to read the terms and conditions of the home loan agreement carefully before signing it. This will help you avoid any inconvenience in the later stage.
So what are you waiting for? Check your eligibility under the PM Awas Yojana and take the first step towards purchasing your dream house, today.
You can get to know the about the perfect credit score for home loan and check your eligibility for home loan with the help of housing loan eligibility calculator.
Read more about Government Housing Schemes
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