Do You Fall in the Credit Linked Subsidy Scheme?

PMAY subsidy scheme

To help you buy your dream home, the Government of India has introduced an interest subsidy scheme named Credit Linked Subsidy Scheme under the Pradhan Mantri Awas Yojana (PMAY). Prime Minister Narendra Modi launched this ambitious housing scheme on 24 June 2015. With an aim to provide ‘Housing for All by 2022’, the government is aiming to reduce the financial impact on first-time home buyers if they fit into the eligibility criteria.

The scheme offers an affordable housing loan to the Economically Weaker Section (EWS), the Low Income Group (LIG) and the Middle Income Group (MIG). Financial assistance provided by the government not only helps these income groups to own a home but also uplifts their standard of living.

If you are looking to own a house under the PMAY subsidy scheme, you may want to know a few things. In addition to the house you have chosen to purchase, the home-loan lender and requisite finances to pay for the down payment, consider additional factors.

Not everyone qualifies for the Pradhan Mantri home loan scheme. There are defined eligibility criteria to fulfil to be eligible for the credit linked subsidy scheme.

Who is Eligible for the Credit Linked Subsidy Scheme

The benefits under the CLSS can be availed by the Economically Weaker Section (EWS), the Low Income Group (LIG) and the Middle Income Group (MIG). Eligible beneficiaries receive an interest subsidy to purchase, construct and build a new house or improve an existing home.

You are eligible for the CLSS if you do not have a pucca residential house in India in your name or in the name of any member of your family. In other words, you can avail of the scheme if you are buying or constructing your first house.

Moreover, to be eligible for the scheme, you and your family members must not have already availed the assistance of the PMAY scheme in the past. Also, while applying for the programme, your age must be 70 years or less.

Apart from these general PMAY eligibility criteria, specific income criteria must be met to qualify for the scheme. These include:

  • If your combined household income per annum is below Rs. 3 lakhs, you are classified under the Economically Weaker Section and eligible for a loan up to Rs. 6,00,000, and an interest subsidy of 6.5% per annum. The carpet area of the house under this scheme should be up to 30 sq. mt. for EWS beneficiaries.
  • If your combined household income per annum is between Rs. 3 lakhs to 6 lakhs, you are classified under the Low Income Group and eligible for a loan up to Rs. 6,00,000, and an interest subsidy of 6.5% per annum. The carpet area of the house under this scheme should be up to 60 sq. mt. for LIG beneficiaries.
  • If your combined household income per annum is between Rs. 6 lakhs to 12 lakhs, you are classified under the Middle Income Group I and eligible for a loan up to Rs. 9,00,000, and an interest subsidy of 4% per annum. The carpet area of the house under this scheme should be up to 120 sq. mt. for MIG I beneficiaries.
  • If your combined household income per annum is between Rs. 12 lakhs to 18 lakhs, you are classified under the Middle Income Group II and eligible for a loan up to Rs. 12,00,000, and an interest subsidy of 3% per annum. The carpet area of the house under this scheme should be up to 150 sq. mt. for MIG II beneficiaries.

Although there is no restriction on the value of the property, there is a limitation on the carpet area to avail the subsidy. This means, you can purchase or construct a house as large as you wish, but the scheme will only cover a carpet area mentioned above. You can avail a housing loan from any financial institution or bank participating in the Pradhan Mantri Awas Yojana Scheme.