29 Jul 2018: Pradhan Mantri Awas Yojana: Process to get home loan subsidy
The Indian government launched Pradhan Mantri Awas Yojana (PMAY) in 2015 with the aim of providing affordable housing for all by 2022.
One of the most talked-about components of this initiative is the Credit-Linked Subsidy Scheme, which enables beneficiaries of the scheme to get a subsidy on their home loan's interest rate.
Here's how you can get the home loan subsidy under PMAY.
CLSS: What is the Credit-Linked Subsidy scheme (CLSS)?
The Credit-Linked Subsidy Scheme (CLSS) provides housing solutions for purchase, construction, improvement/extension of a home.
It can be availed by people belonging to Economically Weaker Sections (EWS), Lower Income Group (LIG) with a household income of up to Rs. 6 lakh/annum, and the Middle Income Group which has a household income ranging between Rs. 6 lakh to Rs. 18 lakh/annum.
Eligibility: Eligibility criteria for getting home-loan interest rate subsidy: Part 1
The loan must be for a property which is located in a city covered under the Pradhan Mantri Awas Yojana (PMAY).
The beneficiary or any member of his/her family (wife, husband, and unmarried children) should not own a house in India.
You should not have availed of a benefit under a government housing scheme earlier.
Eligibility: Eligibility criteria for getting home-loan interest rate subsidy: Part II
Further, in the case of married couples, either one or both of the spouses in joint ownership of the property qualify for a single subsidy.
In case of applicants belonging to the EWS and LIG category, one of the owners of the property for which loan is being taken must be a woman.
Details: Interest rate subsidy, loan amount for income upto Rs. 12L
EWS and LIG (income up to Rs. 6L) get an interest rate subsidy of 6.5% on a maximum loan of Rs. 6L, for a property with a minimum carpet area of 60sqm.
Middle Income Group-1 (income between Rs. 6-12L) get an interest rate subsidy of 4% on a maximum loan of Rs. 9L, for a property with a minimum carpet area of 90sqm.
Fact: Interest rate subsidy, loan amount for income between Rs. 12-18L
Further, for applicants belonging to Middle Income Group-2, an interest rate subsidy of 3% is applicable on a maximum loan amount of Rs. 12 lakh, for a property which has a minimum carpet area of 120sqm.
Part 1: Process for getting home loan interest subsidy under CLSS
Eligible beneficiaries can get the home loan interest rate subsidy by following the below process:
Apply for a home loan from a lending institution listed under the PMAY and ask for a subsidy on the home loan interest rate.
After this, the lending institution will review your application, and if approved it will send it to the Central Nodal Agency.
Part 2: Process for getting home loan interest subsidy under CLSS
Upon verification, if the Central Nodal Agency approves your application it will disburse the subsidy amount to the lending institution.
After this, the lending institution will credit the subsidy amount to your account, lowering your total loan amount.
You may then repay the balance loan amount via Equated Monthly Instalments (EMIs).