In June 2015, the ministry of housing and urban poverty alleviation (MOHUPA) introduced an interest subsidy scheme called Credit-linked Subsidy Scheme under the Pradhan Mantri Awas Yojana (URBAN)-Housing for All.
You can utilise the scheme to buy, construct, or remodel an existing house. Anyone from the Economically Weaker Section (EWS), Lower-income Group (LIG), or Middle-income Group (MIG) can apply for a loan under this scheme.
Banks have already rolled out benefits to customers in line with the scheme. HDFC said they have disbursed loans worth Rs 1,728 crore to 10,764 customers, whose cumulative subsidy was worth Rs 228 crore.
Renu Sud Karnad, managing director of HDFC Ltd, said: “The current government has laid focus on affordable housing with the launch of PMAY and improved the scheme from time to time. They have extended the benefit to the MIG category and have also extended the MIG scheme till March 2019. Carpet area of houses under CLSS for MIG has also been increased.”
Not only banks, developers, too, are upbeat about the scheme. After all, it is helping revive the real estate market by bringing in more customers.
Pradeep Aggrawal, a developer, says: “CLSS is a milestone for the housing sector. Families living in metro cities or Tier 1 or Tier 2 cities earn Rs 20,000-50,000 per month. They certainly want their EMIs to be less and, thus, PMAY is of great help. Today, a family whose household income is around Rs 6 lakh a year will get a subsidy of 6.5% on the home loan interest. This works out to Rs 2.67 lakh on a home loan for 20 years, which is a big amount.”
Eligibility: The beneficiary family should not own a pucca house in his or her name or in the name of any member of his or her family in any part of India.
A beneficiary family under this scheme is deemed to comprises the husband, wife, and unmarried children. An adult earning member, irrespective of marital status, can be treated as a separate household in the MIG category.
A married couple – either of the spouse or together in joint ownership – will be eligible for a single subsidy. The beneficiary family should not have availed of central assistance under any housing scheme from the Government of India or any benefit under any scheme under PMAY.
Citing Aadhaar numbers of the beneficiary family are mandatory in the MIG category The interest subsidy will be available for a maximum loan tenure of 20 years, or the loan tenure, whichever is lower The interest subsidy will be credited upfront to the loan account of the beneficiaries through HDFC, resulting in reduced effective housing loan and Equated Monthly Instalments (EMIs) The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9% Additional loan beyond the specified limits, if any, to be at non-subsidized rates There is no cap on the loan amount or the cost of the property.