Pradhan Mantri Awas Yojana - Credit Linked Subsidy Scheme

The country is estimated to have a shortage of nearly 20 million housing units needed by the rural and urban poor, at far lower price points of ₹5-15 lakh.

Government of India is continuously working to ensure this dream come true for all home seekers in the country. To embark on their vision of Housing for All by 2022, Honourable Prime Minister Mr. Narendra Modi launched Pradhan Mantri Awas Yojana.

Pradhan Mantri Awas Yojana Scheme

This scheme comes with ‘credit linked subsidy scheme’(CLSS) which allows every house constructed, improved, build, purchased or even expanded under this scheme will be given an interest subsidy. With the increase in subsidised loan amount to ₹12 lakh, the scheme is expected to cover a higher proportion of the urban poor.

Under this scheme, the government will be financially assisting the Economically Weaker Section (EWS), Low Income Group (LIG) and Middle Income Group (MIG) in order to achieve its primary aim at providing home for all.

Benefits of Credit Linked Subsidy Scheme

The Credit Linked Subsidy Scheme (CLSS) is a benefit under the Pradhan Mantri Awas Yojana which focuses on helping the Middle Income Groups, Economically Weaker Sections, and Lower Income Groups in India by bringing down their housing loan EMIs by over Rs.2,000 per month by offering an interest subsidy.

CLSS scheme is effective from 1 January 2017. Those who were sanctioned home loans and whose applications are under consideration since the beginning of the year will be eligible for interest subsidy.

The carpet area of houses being constructed under this component of the mission should be up to 30 square metres and 60 square metres for EWS and LIG, respectively in order to avail of this credit linked subsidy.

To be eligible to avail a housing loan under CLSS, the beneficiary family should not own a pucca house in his/her or in the name of any member of his/her family in any part of India.

The beneficiaries under Economically Weaker Sections can have annual income up to Rs.3 lakh. Also, beneficiaries with an annual income of Rs.3 lakh to Rs.6 lakh fall under the Low Income Group category.

Women, Scheduled Tribes, Scheduled Castes, backward classes, minorities, people with disabilities, and transgenders will also be able to make use of this scheme as they will be given preference.

Even Middle Income Group will also be benefitted through this scheme. There are divided into two sets. The first set MIG-I covers people with an annual income of Rs.6 lakh to Rs.12 lakh p.a with an interest rate subsidy of 4% and with a maximum loan amount up to Rs.9 lakh The second set called MIG-II covers people who fall in the income group of Rs.12 lakh to Rs.18 lakh p.a. will get an interest rate subsidy of 3% and with a maximum loan amount up to Rs.9 lakh.

Both sets of beneficiaries can get the maximum tenure of loan can go up to 20 years and the discount rate for Net Present Value(NPV) is 9% for both MIG-I and MIG-II. Recently, the Cabinet increased the carpet area from 90 square metres to 120 square metres for MIG-I. The carpet area for MIG-II was also increased to 150 square metres which was 110 square metres previously.

As many as 70 lending institutions, including 45 Housing Finance Companies and 15 scheduled banks, signed Memoranda of Understanding (MoU) with National Housing Bank (NHB) on Wednesday for implementation of CLSS(MIG) component of Pradhan Mantri Awas Yojana (Urban)

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