Buying a home for the first time? Get CLSS subsidy scheme

The Pradhan Mantri Awas Yojanainitiative was launched by the Government of India to provide affordable housing for all. According to data by the rural development ministry, around 1.12 crore houses will be completed by September 2020 under this scheme.

One of the significant components of this initiative is the credit-linked subsidy scheme,which is directly implemented by the centre. The government launched it to boost growth in the real estate sector and to encourage more individuals from the economically backward sector to purchase their property by opting for institutionalised credit at subsidised rates. 

Till now around 12 lakh beneficiaries have opted for CLSS scheme. Due to the success of the system, the government decided to extend its benefits up to March 2021. Thus, prospective homebuyers can consider applying for a housing credit under this scheme to avail affordable interest rates. However, before that, they should have a comprehensive idea regarding how the credit-linked subsidy scheme works.

The beneficiaries under the credit-linked subsidy scheme have been segregated into four groups based on their yearly income – 

• Economically backward section–

Individuals with an annual income of up to Rs.3 lakh can avail substantial interest subsidy on loan amount for tenures of up to 20 years. Applicants from this group can apply for a loan for the purchase of a house with a carpet area of 30 sq. meters. 

• Lower-income group – 

Individuals with an annual income between Rs.3 lakh andRs.6 lakh are also eligible for a loan amount of Rs.6 lakh, with an interest subsidy of 6.50%. They can avail the loan for a tenure period of 20 years for a dwelling with a carpet area of 60 sq. meter. 

• Middle-income group I – 

Families with an income of Rs.6 lakh to Rs.12 lakh are eligible for an interest subsidy of 4% on credits up to Rs.9 lakh. The loan can be availed for a repayment period of 20 years for a house with a carpet area of 160 sq. meters.

• Middle-income group II –

Those with their annual income range of Rs.12 lakh to Rs.18 lakh are categorised within this group. These individuals can apply for a home loan of up to Rs.12 lakh and avail a subsidy of 3% on the same. Moreover, they can avail the credit for a property with a maximum carpet size of up to 200 sq. meters for a tenure of twenty years.

Eligibility parameters 

However, before applying for a housing loan under the credit linked subsidy scheme, one must meet the following eligibility parameters – 

1. Individuals or their family members who own a pucca house in any part of the country cannot avail this scheme. However, an adult earning member is considered to be a separate household under this scheme. 

2. The beneficiary or his or her family should not have applied for benefits under any other central government housing schemes.

3. The property ownership should either be in the name of a female member of the family or co-owned with a woman family member. 

Borrowers should also bear in mind that credit-linked subsidy scheme can be availed on home loan not only for purchase or construction but also for renovation or addition to an existing property. 

Application procedure 

Individuals can follow the steps below to apply for home loans under a credit linked subsidy scheme –

• Look for a financial institution or a lender that offers home loans under PMAY scheme.

• Click on the online application form and enter all relevant details regarding employment, financial information. Apart from the home loan application, you will also have to fill up the loan subsidy application.

• Submit the form along with the required documents.

• Once the verification is complete, the lending institution will issue a sanction letter.

• They will also claim the subsidy amount applicable to you based on your income from the central nodal agencies.

• Your loan account will then be linked and the subsidy credited to your account.

Before applying, one should check his/her pre-approved offer by entering the name and contact information. Such offers are extended by lending institutions to eliminate hassles and further simplify the loan application procedure. Besides home loans, these offers can also be availed on other financial products like loan against property. 

Individuals can also opt for online tools such as home loan EMI calculator to calculate the monthly instalment amount that they need to pay on the principal, which will enable them to plan a suitable monthly repayment budget beforehand.