Credit Linked Subsidy Scheme 2024-25: (PMAY), Eligible & How Does It Work?

Credit Linked Subsidy Scheme:- The PMAY governs the Credit Linked Subsidy Scheme (CLSS), which is run by the Centre directly. This program’s main goal is to facilitate the growth of institutional credit flow, which will enable the urban poor people to swiftly meet their housing needs. An in-depth examination of the basic idea, qualifying requirements, and significance of this program overall is provided below. Possessing such knowledge at their disposal, one can develop a reasonable understanding of CLSS and its utility.

A Credit Linked Subsidy Scheme: What Is It?

As a part of the Pradhan Mantri Awas Yojana, CLSS seeks to provide lower- and middle-class citizens in the nation with affordable housing loans. Those who apply and fulfill the qualifying standards typically receive a lower interest rate on their home loans. Nonetheless, in order to qualify for this scheme’s benefits, candidates must fulfill a number of requirements.

Moreover, current interest rates are included in the calculation of a housing loan subsidy. It should be noted that the interest subsidy amount is contingent upon tenure and is capped at Rs. 2.35 lakh. The amount of EMI that must be paid is reduced when the aforementioned amount is subtracted from the original loan amount.

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Who is Eligible for CLSS?

The Credit Linked Subsidy Scheme eligibility is elucidated in the table below –

Parameters	Economically Backward Section	Lower Income Group	Middle Income Group -I	Middle Income Group – II
Annual household Income	Rs.3 lakh	More than Rs.3 lakh and Rs.6 lakh	Between Rs.6 lakh  and Rs.12 lakh	Between Rs.12 lakh and Rs.18 lakh
Eligible home loan amount	A maximum of Rs.6 lakh	A maximum of Rs.6 lakh	A maximum of Rs.9 lakh	A maximum of Rs.12 lakh
Loan tenure	20 years	20 years	20 years	20 years
Discounted NPV %	9%	9%	9%	9%
Interest subsidy	6.5%	6.5%	4%	3%
Revised carpet area	30 sq.m	60 sq.m	160 sq.m	200 sq.m

In addition to these, candidates need to meet the following requirements in order to be eligible for PMAY CLSS benefits:

• The property in question must be co-owned by an adult female family member.
• The candidate cannot own a pucca house anywhere in India.
• The subject property must be located inside the census’s statutory towns and its surrounding planning area.
• Candidates should not be recipients of any housing program supported by the federal or state governments.
• Those who qualify can maximize their home loan benefits and save a significant amount on their monthly installments. It is important to note that in order to prove their eligibility, applicants must fulfill extra requirements and present pertinent paperwork.

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Which Documents Are Necessary for PMAY CLSS?

It appears that the following list of documents is necessary for PMAY CLSS:

• PAN (required)
• identity-proving documents, such as a driver’s license, passport, voter card, Aadhaar card, etc.
• These include the most recent utility bills, voter cards, passports, Aadhaar cards, dwelling address certificates, rent agreements on stamped paper, and so on.
• most recent pay stubs
• The salaried individual’s bank statement
• most recent Form 16 and ITR
• bank statements covering at least six months’ worth of loan repayments and accompanying documentation.
• Property records, such as a copy of the chain of title, the sale contract, the letter of allocation, and the payment receipt.

Generally, to take advantage of a CLSS, one must contact a financial institution covered by this program. The loan subsidy application, which must be accurately filled out and submitted with the previously mentioned documentation, will be given to qualified candidates by the financial institution. Upon validation of the papers, the applicant receives the amount of the housing loan paid into their bank account. Following the completion of these prerequisites, nodal agencies begin the process of linking the bank account and granting the subsidy for which the applicant is eligible under this plan. Housing and Urban Development Corporation (HUDCO) and the National Housing Bank (NHB) are the key nodal entities.

CLSS for Middle Income Group (MIG)

Within the Middle-Income Group, two categories of recipients are distinguished. Those with yearly incomes between Rs. 6 lakh and Rs. 12 lakh are covered by the first set of MIG-I. The second group, known as MIG-II, is made up of individuals whose annual income falls between Rs. 12 lahks and Rs. 18 lakh. MIG-I and MIG-II recipients will receive an interest rate subsidy of 4% and 3%, respectively. The maximum loan tenure for both sets of recipients is 20 years. The maximum loan amount for MIG-I and MIG-II is Rs. 9 lakh. and Rs. 12 lakh, respectively. Additionally, for both MIG-I and MIG-II, the Net Present Value (NPV) discount rate is 9%.

The carpet area for MIG-I was calculated to be 90 square meters, and for MIG-II, it was found to be 110 square meters, at the time CLSS was implemented. The Cabinet recently raised the MIG-I carpet area from 90 square meters (968.752 square feet) to 120 square meters (1291.668 square feet). Also expanded was the MIG-II carpet area, which now measures 150 square meters (1614.585 square feet) as opposed to 110 square meters (1184.03 square feet).

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How to Avail PMAY Subsidy Scheme

• Before submitting an application for the Home Loan Credit Linked Subsidy Scheme, you must ascertain your eligibility.
• In the event that you satisfy all qualifying standards, you need to get in touch with the banks or financial institutions taking part in PMAY.
• Complete the PMAY Home Loan Credit Linked Subsidy Application and send it, along with the necessary documentation, to the lender.
• Your bank account will receive the full amount of the home loan after verification.
• Upon disbursing the loan, your lender will initiate contact with the nodal agencies to initiate the process of collecting interest subsidies.
• After verification, the interest subsidy will be credited to your loan account, reducing the overall loan amount as well as your Equated Monthly Installment.

FAQ’s

Q. Does a Credit Linked Subsidy at every bank in the nation?

Ans- Indeed, each bank on the RBI’s list offers the Credit Linked Subsidy.

Q. In accordance with the Credit Linked Subsidy Scheme, who is qualified to receive an interest subsidy?

Ans- A recipient household that does not own a home in any part of India is eligible for this subsidy, subject to income constraints.

Q. Is it possible for a recipient to prolong the loan term past 20 years?

Ans- Indeed. A beneficiary may designate a loan duration beyond 20 years, provided that the lender consents.

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