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How the PMAY CLSS Scheme is Helping Home Buyers

Since the PMAY was introduced in June 2105, the scheme has benefitted several home buyers in India. Read on to know more about the CLSS, which is an integral part of the PMAY and how it can help you become a homeowner.

It is no doubt that buying a home is a big financial commitment. It requires immense financial discipline and a well laid-out plan to be able to pay the EMI consistently on time throughout the loan tenure. And, although many lenders in India offer home loans at attractive interest rates, not many people can afford to buy a house. This where the government of India’s initiative ‘Housing for all by 2022’ has been a significant help to aspiring home buyers.

Under the mission, the government aims to build more than two crores affordable in various urban locations across India. Also, to achieve this target, the government of India has extended the benefits of its flagship scheme, the Pradhan Mantri Awas Yojana to people from all sections of the society.

Under the Credit Linked Subsidy Scheme (CLSS), which is a part of the PMAY, the government has collaborated with various financial organisations, including banks, and NBFCs (Non-Banking Financial Companies) to grant subsidy on home loan interest rates to aspiring home buyers. The partner lenders extend the subsidy benefits to eligible beneficiaries belonging to the EWS (Economically Weaker Section), LIG (Low Income Group) and MIG (Middle Income Group) category.

What is CLSS?

One of the most critical components of PMAY, CLSS provides subsidy on the home loan interest rate to homebuyers who apply for a loan to fund the purchase of their dream home. Under CLSS PMAY, the government pays a subsidy of Rs. 2.67 lakhs on the eligible loan amount. Thus, if you are applying for a home loan under PMAY, you can benefit from lower monthly EMIs.

Let us understand this with an example:

If the annual income of your family is Rs. 6 lakhs or less, and the home that you wish to purchase has a carpet area of 60 sqm, you are eligible to get an interest subsidy of 6.5% for 20 years. Thus, the CLSS also helps you save on the EMI every month.

The subsidy rate you get on the home loan depends on the income category you belong. For the benefit of the home loan borrowers, the government has categorised the customer in four categories.

  • EWS and LIG

People whose annual household income is between Rs. 3 lakhs and Rs. 6 lakhs fall under this group. They are subject to get a 6.5% interest subsidy on loan up to Rs. 6 lakhs for 20 years.

  • MIG – I

Families that have an annual income ranging from Rs. 6 lakhs to Rs. 12 lakhs are categorised under this group. Home loan applicants under this category can get interest subsidy of 4% on loan up to Rs. 9 lakhs for 20 years.

  • MIG – II

Families with a total household income of Rs. 12 – 18 lakhs per annum are subject to a home loan interest subsidy of 3% for loan up to 12 lakhs.

Note – For all three categories, while there is no limit on the maximum amount borrowed, the subsidy is applicable only on loan on the maximum eligible amount.

Other Important Requirements to Avail CLSS Benefit

  • You or any of your family members must not own a pucca house in any part of India
  • You or any of your family members should not have availed financial assistance under any other central or state government housing scheme
  • The home you wish to purchase under the programme must compulsorily include a female member of the house either as a co-owner or the sole owner.

Final Word

The introduction of PMAY CLSS has made the home buying process more affordable for all. If you are eager to become a homeowner, apply for the PMAY and make your dream come true.

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