Explaining the Credit-Linked Subsidy Scheme for MIGs under the Pradhan Mantri Awas Yojana

Pradhan Mantri Awas Yojana, PMAY launched by the Government of India in 2015 aimed at ‘Housing for All’. The govt. targeted housing for people who belong to the lower income group LIG, economically weaker section, and Middle Income Group in India. It was proposed that this subsidy scheme will deliver 2 crore permanent houses in urban as well as rural areas by the year 2022. The Credit Linked Subsidy Scheme (CLSS) is part of the PMAY and was introduced in 2017 to provide interest subvention on home loans taken by eligible citizens for buying or constructing a house.

For the first time, the central government recognized the Middle Income Category (MIG) as a category that needed some financial assistance when buying a home. Let us explore in detail the Credit-Linked Subsidy Scheme for MIGs under the Pradhan Mantri Awas Yojana-Urban (PMAY).

Need

There has been a steep demand for housing amongst the MIG section of society, especially for the affordable category. With the introduction of the CLSS in the PMAY for the MIG category, the government would subsidize the interest liability on a home loan.

PMAY Credit-Linked Subsidy Scheme (CLSS) for MIG Group- Criteria & Benefits

For the Pradhan Mantri Awas Yojana subsidy, the government has divided households into different income groups. EWS is the economically weaker section, LIG is the low-income group, MIG is the middle-income group (2 categories), and HIG is the high-income group.

There are two categories in the MIG (Middle Income Group) that will be eligible for interest subsidy on home loans, here the family income shall be considered.

MIG 1 Category – Family incomes above Rs. 6 lakh and up to Rs. 12 lakh

MIG 2 Category – Family incomes above Rs. 12 lakh and up to Rs. 18 lakh

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Under the Credit-Linked Subsidy Scheme (CLSS), borrowers will get a subsidy on part of their loan amount, depending on the buyer category they fall in. CLSS for MIG I and MIG II supports a carpet area of 160 square meters and 200 square meters carpet area as per income eligibility

For MIG-I, an interest subsidy of 4% has been provided for loan amounts up to Rs.9 lakh, while for MIG-II, an interest subsidy of 3% has been provided for a loan amount of Rs.12 lakh.

The interest subsidy is calculated at a rate of 9% NPV over the tenure which can be a maximum of 20 years. Housing loans above Ru. 9 lakh and Ru. 12 lakhs will be at non-subsidized rates.

Also, note that the loans should have been used either for the purchase of under-construction property from the secondary market or for the construction of the borrower’s own home.

Who Qualifies under the PMAY CLSS?

• The applicant must not own a pucca house in his/her name or the name of any family member in any part of India.
• The beneficiary family should comprise of husband, wife, and unmarried children.
• The property must be located within the statutory towns of the 2011 census and its adjacent planning area.
• An applicant must not be registered under any central/state housing scheme
• A woman should be a co-owner and co-borrower of the property
• Household income for EWS should not exceed Rs.3 lakh per annum, for LIG it should not exceed Rs.6 lakhs per annum, for MIG 1 should be between Rs.6 to 12 lakh per annum and MIG 2 should be between Rs.12 to 18 lakh per annum.

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As for the PMAY subsidy latest news 2022, for the EWS and LIG sections, the credit-linked subsidy scheme’s last date was till 31st March 2022 while for the MIG category it was valid only up till March 31st, 2021.

The PMAY-CLSS has served to be a boon for the home seekers falling into the MIG category of society. This handy guide would help you understand the nuances better.

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