In order to expand institutional credit flow to the housing needs of urban poor, Pradhan Mantri Awas Yojana has implemented Credit Linked Subsidy Scheme (CLSS). The prime beneficiaries of the scheme are the people belonging to Economically Weaker Section (EWS). Through this scheme, the beneficiary is eligible to avail interest subsidy on the purchase/construction of a house.
The scheme is also available for the enhancement of a dwelling unit. Under CLSS EWS Scheme, the beneficiaries seeking housing loans from Banks, Housing Finance Companies and other such institution would be eligible for an interest subsidy at the rate of 6.5 % for a tenure of 20 years or during tenure of loan whichever is lower. The credit linked subsidy will be available for the amount up to Rs. 6 lakhs and additional loans beyond Rs.6 lakhs will be at non-subsidized rates. The interest subsidy will be credited upfront to the loan account of beneficiaries through Primary Lending Institutions, resulting in reduced effective housing loan and Equated Monthly Installment. The Net Present Value (NPV) of the interest will be calculated at a discount rate of 9%.
The ownership of the house acquired/constructed with central assistance under the mission should be in the name of the female head of the household or in the joint name of male head of the household and his wife. It is only when there is no female member in the family, the house can be in the name of the male member of the household.
The subsidized loan is available only for new construction, acquisition and addition of rooms, kitchen, toilet etc. to the existing dwelling as incremental housing.
The benefit of CLSS EWS Scheme can be taken only by the eligible candidates. The eligibility criteria as defined by the authorities is mentioned below:
- The beneficiary family should comprise of husband, wife and unmarried children
- The family should not own a pucca house either in his/her name or in the name of any member of his/her family in any part of India
- The benefit of the scheme is available to the EWS Households having annual income up to Rs. 3 lakhs.
- Under CLSS LIG Scheme, the benefit will be given to the households having annual income between Rs. 3,00,001 to Rs. 6,00,000
- Preference under the scheme, subject to beneficiaries being from EWS/LIG segments, should be given to Manual Scavengers, Women (with overriding preference to widows), persons belonging to Scheduled Castes/ Scheduled Tribes/ Other Backward Classes, Minorities, Persons with disabilities and Transgender.
Areas that can be Constructed:
- Carpet area of house being constructed or enhanced under this component of the Mission should be up to 30 square meters for EWS category and upto 60 square meters for LIG category.
- Beneficiary, at his/her discretion, can build a house of larger area but interest subsidy would be limited to first Rs.6 lakh only.
- For incremental housing/extension, the area limit will be 30 sq.mt. and 60 sq.mt. of carpet area for EWS and LIG category respectively
Details of Subsidy and Loan
- Maximum loan amount: As per eligibility of customer decided by Bank / Financial Institution based on due diligence
- Maximum loan tenure : based on the guidelines of the PLI
- Maximum tenure for subsidy computation: 20 years or the tenure of the loan, whichever is lower
- Maximum loan amount for subsidy calculation: Rs. 6 lakh
- Interest rate for subsidy : 6.5%
Ria Jain has been writing extensively on various Home Loan topics. The latest one CLSS EWS Scheme will help you understand the product better.