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Credit Linked Subsidy Scheme (under Pradhan Mantri Awas Yojana)

In order to empower people to get their dream home, honorable Prime Minister has announced a comprehensive and a progressive mission, 'Pradhan Mantri Awas Yojana – Housing for All' on 17 June, 2015.

One of the major verticals of Pradhan Mantri Awas Yojana (PMAY) is Credit Linked Subsidy Scheme (CLSS) for Lower Income Group/Economically Weaker Section (EWS/LIG). Under this scheme, Central government provides financial assistance through lending Institutions to eligible beneficiaries across all statutory towns as per 2011 census and their adjacent planning area (updated by the government from time to time)

The interest subsidy is channelized through three Central Nodal Agencies - National Housing Bank (NHB), Housing,Urban Development Corporation (HUDCO) and State Bank of India.

IIFL Home Loans is an approved lender, and loan applications which meet eligibility criteria for CLSS subsidy are forwarded to the National Housing Bank (NHB) for approval. An applicant can avail maximum interest subsidy of upto Rs 2.67 lacs*. Central government provides interest subsidy which is credited to eligible beneficiary’s loan account. Hence, a beneficiary receiving subsidy of Rs. 2.67 lac* on a loan amount of Rs. 20 lac for a tenure of 20 years, at interest rate of 8.45% actually gets loan a home loan at an effective rate of 6.56%.

IIFL Home Loans has been helping beneficiaries to avail this subsidy across the country.

Check Subsidy Eligibility Apply for Home Loan Know More About CLSS - PMAYDownload our PMAY Brochure 2020-21

Credit Linked Subsidy Scheme


EWS and LIG households/families, whose annual household income is upto Rs 6 lakh are eligible to avail subsidy under this scheme; The ‘family’ must not own a pucca house in any part of India. Female ownership in property is mandatory. Subsidy is credited upfront to the loan account of beneficiary resulting in reduced effective housing loan and EMI.

Features of CLSS EWS/LIG

Interest Subsidy At A Rate Of 6.5%* On Home Loans For A Tenure Of 20 Years Or Tenure Of Loan, Whichever Is Lower

The Net Present Value (NPV) of the interest subsidy calculated at a discount rate of 9 %

Maximum Interest Subsidy Upto Rs 2.67 Lakh*

Subsidy is Credited Upfront in the Loan Account of Beneficiary Resulting In Reduced Effective Housing Loan And EMI

Aadhar Card of all Household members Is Mandatory For Applying For CLSS-PMAY Scheme

Beneficiaries under Pradhan Mantri Awas Yojana (PMAY)

The Pradhan Mantri Awas Yojana (PMAY) was introduced in June 2015 to provide affordable housing to the urban poor with a target of building 2cr affordable houses by March 2022. The PMAY has 2 components i.e. PMAY-U for the urban poor and PMAY-G for the rural poor. This PMAY is linked to other schemes to ensure houses have a toilet, electricity connection, LPG gas connection, access to drinking water and Jan Dhan banking facilities. A total of 1cr homes had been approved till December 2019.
Beneficiaries under the PMAY
  • PMAY Beneficiary family will comprise husband, wife, unmarried sons and unmarried daughters
  • The condition is that such beneficiary family should not own a pucca house in the name of any of the members in any part of India
How are PMAY beneficiaries identified and selected?
Pradhan Mantri Awas Yojana (PMAY) scheme caters mainly to the housing needs of the urban and rural poor. This includes slum dwellers residing in confined areas with inadequate infrastructure, poor sanitation and absence of clean drinking water.
Beneficiaries are of 3 types i.e. Middle Income Groups (MIGs), Low Income Groups (LIGs) and Economically Weaker Section (EWS). The annual income for EWS category beneficiaries is capped at Rs3 lakh, but it can go up to Rs18 lakhs for MIG.
Beneficiaries from EWS category are eligible for complete assistance under PMAY while beneficiaries from LIG and MIG categories are only eligible for Credit Linked Subsidy Scheme. LIG / EWS beneficiaries must submit an affidavit as income proof to the authority.

How to Apply for Pradhan Mantri Awas Yojana (PMAY) Online?

The best way to apply for the PMAY is to use the online application process as it is simple & convenient and saves time. Ensure to keep your bank account, household income and Aadhar details handy when you make the application. This can save a lot of time.
Steps to apply for Pradhan Mantri Awas Yojana (PMAY) online
Start your PMAY journey by visiting the official website of the PMAY as under http://pmaymis.gov.in/
  • On the website, click on the "Citizen Assessment" menu as under.

  • Select whether you belong to EWS / LIGH / MIG or slum dweller category. Then enter your 12-digit Aadhaar card number which will redirect to the application page.
  • Fill your personal details, income, residential address and bank account details in the application page.
  • After filling the application, tick the "I am aware" option at the end of the page and click "Save" button
  • Now, you will see a system generated application number which you must save for future reference and print the duly-filled application.
  • Submit the form at nearest CSC office with the required documents
Some preparatory steps in the process
Before filing the PMAY application, make sure to check your eligibility and that your name is listed in the beneficiary list. You can submit your BPL certificate to the lending institution and they will notify you if you are eligible for PMAY. You can also check the list of beneficiaries online by visiting the official website. Make sure to check the updated list. These preparatory steps will make the application process smoother.

How Does PMAY Work Through the Borrower's Bank?

The process for the borrowing bank to disburse the loan under PMAY is quite simple. Here are the key steps involved.
Key steps to get the interest rate subsidy under PMAY
  • Apply for a home loan from any of the listed lending institutions asking for subsidy
  • The lending institution will review your application and, if eligible, your application will be sent to the Central Nodal Agency
  • If your application has not discrepancies, it is verified and approved and the Central Nodal Agency will disburse the subsidy amount to the lending institution
  • This amount is credited to your account by the lending institution which will lower your total loan amount.
  • You can continue paying the EMIs towards the balance loan amount.
Calculating the EMI on the PMAY
Pradhan Mantri Awas Yojana scheme aims to simplify the process of purchasing a home for the urban poor and weaker sections of society through EMIs at reasonable rates of interest. The rate of interest is much lesser than commercial rates, thus offering subsidised loans.
To calculate EMI log on to the PMAY website as under
Then fill the following details
  • Total loan amount in rupees
  • Rate of interest
  • Total loan period in months
Once the following details are submitted, click on the "Calculate" option to get subsidy amount and the EMI payable.

Pradhan Mantri Awas Yojana FAQs

Adult female membership is required in property structure. In case of absence of an adult female member in a household, the property can be registered in the name of a male member only.
  • For EWS/LIG - Husband, Wife and unmarried children constitute household/Beneficiary Family
  • An adult earning member (irrespective of its marital status be considered as separate household)
Following documents need to be submitted to the branch officer as per IIFL HFL Credit Policy. The list of documents is mentioned below:
  • Aadhaar of all household members
  • Notarized Affidavit cum Undertaking is mandatory
As the household does not own a Pucca house, he can apply for subsidy under the scheme subject to additional qualifiers such as annual household income, property in urban/adjacent area etc.
Subsidy amount shall not be adjusted against tenure. The impact of subsidy would be adjusted against principal only, further impacting EMI amount.
  • EWS/LIG - No, there is no capping on minimum/maximum property value or area as per the scheme guidelines issued by the Ministry of Housing and Urban Poverty Alleviation
No, household cannot take the benefit under CLSS as spouse in beneficiary family/household already owns one property.
Scheme mentions that “The beneficiary 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 to be eligible to receive central assistance under the mission”

Therefore, beneficiary family already owning shop, commercial establishment, plot, factory but not owning a pucca house clears the eligibility parameter of 1st house ownership.
The income norms for various Household categories are defined as under:
  • Annual Household Income of EWS/LIG should be less than Rs. 6 Lakhs
Post disbursement of the loan amount, IIFL HFL may claim the Credit Linked subsidy for eligible borrowers from National Housing Bank(CNA). .On receipt of Subsidy amount from CNA, the Principal Outstanding in Home Loan Account of the Beneficiary is Reduced to the tune of Subsidy amount. Accordingly, EMI of the Beneficiary is reduced
A Customer is eligible for maximum subsidy if the disbursed amount is equal to or more than Rs. 6 lakhs and the loan tenure is of minimum 20 years. In case the Loan disbursement or tenure is Below 6 lakhs the subsidy would be reduced proportionately. Kindly refer to the subsidy calculator.
Repairing work in the existing house may be undertaken in houses which are kutcha, semi pucca and require extensive renovation to make it into a pucca house. However, this is applicable only in case houses area is below 60 sqmtrs.

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