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Earlier this year, the government had announced plan to implement CLSS (Credit Linked Subsidy Scheme) for middle income group (MIG) home buyers under a home loan scheme named Pradhan Mantri Awas Yojna (PMAY). Here’s what you need to know related to this scheme.
Eligibility
All home buyers who are middle class with annual incomes from Rs. 6 Lakh to Rs. 18 Lakh per year shall be eligible to receive subsidy on interest on home loans under PMAY scheme.
Benefits
The government will provide 4% of subsidy on home loan interest, i.e. up to Rs. 9 Lakh of households who earn up to Rs. 12 Lakh annually and 3% on loans around Rs. 12 Lakh of households with income of Rs. 18 Lakh per year.
Exclusions
No subsidy will be applicable on home loans over Rs. 9 Lakh to Rs. 12 Lakh.
Validity
For the middle income group residents, the credit linked subsidy scheme is applicable currently on all home loans taken in the year 2017.
Sizes of Homes
The interest subsidy is applicable on home loans for purchase or construction of homes with 90 sq. meters of carpet area by the households earning around Rs. 12 Lakh annually and of 110 sq. m. by the households earning around Rs. 18 Lakh annually.
Tenure of loan
There are maximum 20 years of tenure of home loans or the ones preferred by buyers, whichever is low.
Processing fee
There is no processing fee charged by housing finance companies or banks from applicants who fall under CLSS.
Reduction in EMI
Under this scheme, the 4% of interest subsidy will be applicable on EMI, i.e. by Rs. 2062 monthly on home loan of over Rs. 9 Lakh and subsidy of 3% will lower the outgo per month by Rs. 2019 on loan of Rs. 12 Lakh, considering interest of 8.65% on normal home loan.
Who will get preference?
Women with overriding preference to single working women, widows, from scheduled tribes and scheduled castes, other backward classes, transgender and differently abled people can get preference in this scheme. This year, the government has issued Rs. 1000 Cr. this year for CLSS (MIG) Scheme in Union Budget.

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