Credit Linked Subsidy Scheme (CLSS) for LIG / EWS

Recently, Pradhan Mantri Awas Yojana (PMAY) has been updated for the year 2017 for Economically Weaker Section (EWS) and Lower Income Group (LIG). The housing loan has been extended to 20 years instead of 15 years.

Credit linked Subsidy scheme under Pradhan Mantri Awas Yojana (PMAY) has been introduced in 2015 in order to diversify the institutional credit flow to the housing needs of the urban poor. Economically Weaker Section (EWS) and Lower Income Group (LIG) are the eligible sections to avail the Credit Linked Subsidy for the purpose of acquisition and construction of the houses.

CLSS (Credit Linked Subsidy Scheme) for EWS (Economically Weaker Section) / LIG (Lower Income Group)

Illustrative Example Loan tenure -20* years/240 months

All figures in Indian Rupees

	Loan Amount	Loan Amount eligible for Subsidy	Interest Subsidy	Balance Loan	Initial EMI @10%	Reduced EMI after crediting the Subsidy	Monthly savings	Annual savings
Eg	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
				(1 – 3)			(5 – 6)	(7) / 12
I	3,00,000	3,00,000	1,33,640	1,66,360	2,895	1,605	1,290	15,480
II	6,00,000	6,00,000	2,67,280	3,32,720	5,790	3,211	2,579	30,948
III	10,00,000	6,00,000	2,67,280	7,32,720	9,650	7,071	2,579	30,948

Above figures are indicative and may vary from case to case basis.

*Came into effect from 1^st January 2017.

How to Apply

Interested beneficiaries for CLSS LIG / EWS can apply directly to PLIs (Primary Lending Institutions) and after the verification, PLIs will sanction loans and thereafter claim the subsidy from CNAs (Central Nodal Agencies).

Processing Fees

There are no processing fees for CLSS by PLIs for the applicants under CLSS. So, one can focus on the EMIs and enjoy this benefit.

Prime Minister Narendra Modi’s vision was to provide houses to underprivileged families by the time India completes its 75^th year of independence. And this vision has culminated into Pradhan Mantri Awas Yojana. A timely manifestation of the project will actually help India to expand its organized housing in the country.

PMAY Home Loan for EWS / LIG Subsidy

• Maximum loan amount – As per the eligibility of the customer
• Maximum loan tenure – As per the guidelines of the Primary Lending Institutions (PLI)
• Maximum loan amount for subsidy calculation – Rs. 6 lakh
• Maximum rate for subsidy – 6.5 %

Eligibility Criteria for CLSS for EWS / LIG

• The beneficiary family should comprise of husband, wife and unmarried children.
• The beneficiary family should not own a pucca house in any part of the country
• The annual income of the Economically Weaker Section (EWS) should be up to Rs. 3,00,000.
• The annual income of the Lower Income Group (LIG) should be between Rs. 3, 00,000 to Rs. 6, 00,000.
• Under the scheme, priority will be given to women (especially widow), scheduled caste, scheduled tribe and other backward classes, minorities, differently abled and transgender.

Features of Credit Linked Subsidy Scheme

• Beneficiaries of Economically Weaker Section (EWS) or Low Income Group (LIG) will be eligible for an interest subsidy of at the rate of 6.5% for a tenure of 20 years which has been updated by the Government.
• Subsidized loan amount under Credit Linked subsidy scheme will be up to Rs, 6 lakh, additional loan beyond that will be considered as non – subsidized loan amount.
• A loan will be credited to the beneficiary for the purpose of new construction and addition of rooms kitchen, toilet etc. as incremental housing.
• 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 1^st
• Also under the MIG I category, a four per cent interest subsidy will granted to the beneficiaries, whose annual income is between Rs. 6 lakh and Rs. 12 lakh, on a loan of up to Rs. 9 lakh.
• And for MIG II category, the beneficiaries with an annual income of Rs. 12 lakh to Rs.18 lakh get an interest subsidy of three per cent on a loan of up to Rs. 12 lakh.
• The carpet area under this mission should be up to 30 square meters and 60 square meters for EWS and LIG.
• The beneficiary can build a house in a larger area as well, but the loan will be limited to Rs. 6 lakh only.
• Central Nodal Agencies (CNA) has been identified by Housing and Urban Development Corporation (HUDCO) and National Housing Bank (NHB) to channelize the lending institutions and for monitoring the progress of the component.
• Primary Lending Institutions (PLIs) can register only with one CNA by signing (Memorandum of Understanding – agreement between two parties) MOU.
• CNAs (Central Nodal Agencies) will provide periodic monitoring inputs to the Ministry of Housing and Urban Poverty Alleviation through regular monthly and quarterly reports.
• State Level Nodal Agencies (SLNA) will facilitate the beneficiaries by doing the paper works, documentations or in getting approvals.
• Beneficiary’s identification should be linked to Aadhaar, voter ID or any other identification in order to avoid duplicity.
• Also, the beneficiaries are required to submit self – certificate / affidavit as proof of income.
• Under the scheme, priorities will be given to Manual Scavengers, Women (special preference given to the widows), Scheduled Caste, Scheduled Tribe and other backward classes, Minorities, Persons with disabilities and Transgender.

	EWS	LIG
Annual household income limit	₹3,00,000/-	Between ₹3,00,001/- to ₹6,00,000/-
House size or the maximum carpet area	30 square meter	60 square meter
Interest subsidy	6.50%	6.50%
Loan limit for interest subsidy	₹6,00,000/-	₹6,00,000/-
Period of subsidy	20 years or loan tenure whichever is less	20 years or loan tenure whichever is less
Maximum amount of subsidy	₹2,20,000/-	₹2,20,000/-

Highlights of Credit Linked Subsidy Scheme under PMAY

• The subsidized loan amount under Credit Linked Subsidy Scheme is up to Rs. 6 lakh. Additional loan beyond Rs. 6 lakh will be considered at non – subsidized rate.
• In order to get reduced effective housing loan and Equated Housing Monthly Instalments (EMI) the subsidized interest will be credited to the beneficiaries loan account through Primary Lending Institutions (PLI).

Refer to the link below to know the Primary Lending Institutions (PIL) under PMAY http://www.pmawasyojana.in/2016/06/list-of-primary-lending-institutions.html

• The Net Present Value (NPV) will be of the interest subsidy will be calculated at a discount rate of 9%.
• The registration of the houses should be in the name of the female head of the household or in the name of the joint name of the male head of the family and his wife. In case of no adult female member in the family, the house can be in the name of the male member of the family.