The Pradhan Mantri Awas Yojana (PMAY) (URBAN)-Housing for All was a mission launched by the Indian government with the goal of increasing homeownership.
It aimed to achieve ‘Housing for All' by 2022. A subsidy scheme known as the Credit Linked Subsidy Scheme (CLSS) was launched under this mission to provide interest subsidies on loans obtained for the purchase/construction/extension/improvement of a house.
Given the projected growth of urbanization and the resulting housing demand in India, the PMAY scheme caters to the Economically Weaker Section (EWS)/Lower Income Group (LIG) and Middle Income Groups (MIG).
The Ministry of Housing and Urban Poverty Alleviation has established a road map as well as the eligibility criteria that prospective applicants must meet. It has also enlisted the assistance of some of the country's leading banks to provide construction loans under PMAY.
Banks provide loans at a lower interest rate because the government pays the rest on the applicant's behalf. This model of subsidized loans assists more economically disadvantaged people in constructing a home. This is how it appears:
The Applicant's Family must not own a home in any part of the country.
In the case of a married couple, either a single or joint ownership deal is permitted, with both options receiving only one subsidy.
The Applicant's Family must not have benefited from any of the Government of India's housing-related schemes.
Every applicant must meet the eligibility criteria established by the PMAY committee in order to receive a house or financial assistance from the government. Prospective applicants have been divided into six groups.
Category |
Family Income Annual |
Max Carpet Area |
EWS |
Rs.3 lakh |
60 square meters (645.83 square feet) |
LIG |
Rs.6 lakh |
60 square meters (645.83 square feet) |
MIG1 |
Rs.6 lakh to Rs.12 lakh |
160 square meters (1722.33 square feet) |
MIG2 |
Rs.12 lakh to Rs.18 lakh |
200 square meters (2152.78 square feet) |
Economically Weaker Section (EWS): The EWS category includes people with annual household incomes of less than Rs.3 lakh. An applicant claiming to be on EWS, on the other hand, must provide relevant proof to the government in order for the government to verify their claims.
Light Income Group (LIG): People in the LIG category typically have annual household incomes ranging from Rs.3 lakh to Rs.6 lakh. Again, in order to be considered, they must provide sufficient proof of their financial situation.
Medium Income Group (MIG1): Those with an annual household income of less than Rs.12 lakh are classified as MIG1. These individuals are eligible for loans of up to Rs.9 lakh for the construction of a home.
Individuals earning an annual household income of Rs.12 to Rs.18 lakh will be classified as MIG2 under the PMAY scheme. These individuals are eligible for loans of up to Rs.12 lakh.
Minorities: People from minority groups such as SC/ST/OBC will be classified as minorities. These individuals must meet in order to provide relevant caste and income certificates in order to be considered for the PMAY scheme.
Women: If they apply under the PMAY scheme, women from the EWS/LIG categories will be considered.
Aside from that, an applicant must meet a basic requirement. If the beneficiary is a family, for example, it must include a husband, wife, and unmarried children. In addition, no one in the family should own a home in their name.
Particulars |
MIG 1 |
MIG 2 |
Household Income |
Rs.12 lakh p.a. |
Rs.18 lakh p.a. |
Loan Tenure (Max) |
20 years p.a. |
20 years p.a. |
Interest subsidy |
4% p.a. |
3% p.a. |
The eligible amount of loan for interest subsidy (CLSS) |
Rs.9 lakh |
Rs.12 lakh |
Interest subsidy (Max) |
Rs.2.35 lakh |
Rs.2.3 lakh |
Discount for NPV (Net Present Value) |
9% |
9% |
Dwelling unit max carpet area |
90 sq. mt |
110 sq. mt |
Monthly EMI (8.65%) with interest subsidy |
Rs.5,834 |
Rs.8,059 |
Monthly EMI (8.65%) without interest subsidy |
Rs.7,894 |
Rs.10,528 |
Amount of loan |
Rs.3 lakh |
Rs.6 lakh |
Rs.10 lakh |
Subsidy Amount |
Rs.3 lakh |
Rs.6 lakh |
Rs.6 lakh |
Balance loan |
Rs.1,66,360 |
Rs.3,32,720 |
Rs.7,32,720 |
Interest subsidy |
Rs.1,33,640 |
Rs.2,67,280 |
Rs.2,67,280 |
Initial EMI |
Rs.2,895 |
Rs.5,790 |
Rs.9,650 |
Reduced EMI after subsidy credit |
Rs.1,605 |
Rs.3,211 |
Rs.7,071 |
Savings on a monthly basis |
Rs.1,290 |
Rs.2,579 |
Rs.2,579 |
Savings on an annual basis |
Rs.15,480 |
Rs.30,948 |
Rs.30,948 |
The Credit Linked Subsidy Scheme (CLSS) is a benefit provided under the PMAY Scheme that allows the Economically Weaker Section (EWS), Low Income Group (LIG), and Medium Income Group (MIG) to obtain home loans with lower EMIs thanks to an interest subsidy. Under the Pmay subsidy eligibility, the beneficiary will receive an upfront interest subsidy on the principal amount, resulting in a lower effective home loan and EMI.
The Credit Linked Subsidy Scheme (CLSS) under PMAY makes home loans more affordable by providing a subsidy on the interest component, which reduces the customer's outflow on the home loan. The amount of the subsidy under the scheme is largely determined by the customer's income category and the size of the property unit being financed.
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