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CLSS – Credit Linked Subsidy Scheme under PMAY

Pradhan Mantri Awas Yojana (PMAY) was launched by Honourable Prime Minister Narendra Modi on 25th June 2015. This initiative has been taken in order to provide housing for all by 2022.

The scheme is conducting following programs for addressing the

Housing problem:

  • Slum rehabilitation
  • Provision of Credit – linked subsidy for the weaker section
  • Provision of affordable housing  by collaborating with public and private sectors
  • Beneficiary- led house construction or enhancement

The aim of the program is to provide a home to nearly 20 million people belonging to the low income families and underprivileged sections in the identified urban and semi – urban areas by 2022.

Another interest subsidy scheme was launched in the same year called Credit Linked Subsidy Scheme (CLSS) under Pradhan Mantri Awas Yojana (Urban) – Housing for All for purchase, construction, extension, improvement of house to cater economically weaker section (EWS) or Lower Income Group (LIG) having an income up to Rs.3 lakh, and Low Income Families earning up to Rs.6 lakh only.

Eligibility Criteria for Credit Linked Subsidy Scheme (CLSS)

Following are the list of eligibility criteria for CLSS:

  • A family comprises husband, wife and children
  • None of the family members should have a pucca house registered under their name.
  • Families from Economically Weaker Section (EWS) having an income up to Rs. 3 Lakh are eligible
  • Low Income Families earning up to Rs.6 lakh only are also eligible for this scheme.
  • The registration application should be in the name of the male or female head of the family applying for the subsidy
  • This caters only to families looking only to buy a house and not renovate it.

Benefits of the Credit Linked Subsidy Scheme

Below is the list of the benefits of Credit Linked Subsidy Scheme:

  • First time home buyers will get a subsidy benefit of 6.5% for a tenure of 15 years.
  • The subsidy is paid upfront to the bank when availing the loan.

Highlights of the Credit Linked Subsidy Scheme

  • Beneficiaries for Mid Income Group (MIG) category are required to provide Aadhaar numbers.
  • The interest subsidy schemes will be available for the tenure of 20 years
  • The interest subsidy is paid upfront to the bank resulting in reduced effective housing loan and Equated Monthly Instalment (EMI).
  • The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9 %.
  • At present, the carpet area of MIG I is 90 sq m i.e. 968.752 sq ft which will be increased to 120 sq m i.e. 1291.668 sq ft. And for MIG II category the carpet area would be 150 sq m i.e. 1614.585 sq ft instead of 110 sq mt 1184.03 sq ft. And these changes will be implemented from January 1st


What is the objective of the scheme?

The objective of the scheme is to provide financial assistance to the low income group category i.e. Economically Weaker Sections (EWS) and Low Income Group (LIG) for purchasing/construction of residential units under affordable housing scheme

What is the maximum loan amount that can be availed under the said scheme?

The maximum and minimum loan amount would be in line with the extant Home Loan scheme of the Bank.However, subsidy shall be available for loan up to first 6 lakh

Whether the customers required submitting the claim for availing interest subsidy directly to MoHUPA / NHB?

Customers need not have to submit the claim neither to National Housing Bank (NHB) nor to Ministry of Housing and Urban Poverty Alleviation (MoHUPA). IDBI Bank on behalf of the customers would submit the claim to NHB for availing the interest subsidy.

What is the maximum loan tenor offered under this scheme?

The maximum loan tenor is in line with the standard home loan schemes of the bank i.e. maximum 30 years for a salaried person.

Do banks across the country offer the credit linked subsidy?

Yes, all banks listed under the scheme offer the credit linked subsidy.  

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