The Pradhan Mantri Awas Yojana was launched by the honourable Prime Minister of India with the mission to fuel the concept of "Housing for all” by 2022. The PMAY has two components, i.e. PMAY(U) for the urban poor and PMAY-G for the rural poor.

The Pradhan Mantri Awas Yojana (Urban) or PMAY (U) was introduced on 25th June 2015. This is a flagship mission of the government of India implemented by the Ministry of Housing and Urban Affairs (MoHUA)). The PMAY(U) comprises four components to include a greater number of people considering their income, finance and availability of land.:

  • “In-situ” Slum Redevelopment (ISSR)
  • Credit Linked Subsidy Scheme (CLSS)
  • Affordable Housing in Partnership (AHP)
  • Beneficiary-led individual house construction/enhancements (BLC)

Credit Linked Subsidy Scheme (CLSS) is a central sector scheme under the PMAY(U) mission wherein interest subsidy on a home loan is provided through Central Nodal Agencies (CNAs) and Primary Lending Institutions (PLIs) to the Economically Weaker Section (EWS) and Lower Income Groups (LIG) beneficiaries for purchase, construction or enhancement of house. IIFL Home Loans is one of the primary lending institutions that aims to boost house ownership among EWS and LIG by offering them affordable housing loans.

All houses constructed under the PMAY (U) mission have basic amenities such as water supply, electricity, toilet, LPG gas connection, kitchen and Jan Dhan Banking needs. Through this mission, the government of India ensures to provide a sense of security, dignified living and pride of house ownership to the beneficiaries.

Credit Linked Subsidy Scheme (under Pradhan Mantri Awas Yojana)

Under PMAY(U) mission, the Credit Linked Subsidy Scheme (CLSS) is one of four verticals wherein interest subsidy on a home loan is offered to the eligible beneficiaries of Economically Weaker Section / Lower Income Group (EWS/LIG) for purchase, construction or enhancement of house.

The interest rate subsidy is granted to the beneficiaries upfront on the loan accounts of beneficiaries through the Primary Lending Institutions (PLIs), thus reducing the effective housing loan and home loan EMI. Net Present Value of the Credit Linked Subsidy is calculated at a discounted rate of 9%.

Beneficiaries falling under EWS and LIG categories are eligible to get an interest subsidy up to Rs.2.67 lakh*.

The last date for availing the CLSS subsidy for the LIG and EWS is extended till 31st March 2022. Apply for CLSS subsidy and get the benefit to repay the loan at reduced EMIs.

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

CREDIT LINKED SUBSIDY SCHEME – FEATURES

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EWS / LIG beneficiaries can avail of a maximum interest subsidy of up to Rs.2.67 lakhs

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The scheme provides interest subsidy to eligible EWS/LIG beneficiaries on home loans up to Rs. 6 lakhs at the rate of 6.50% for the home loan tenure of up to 20 years or whichever is lower.

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

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Interest subsidy on a home loan is provided to EWS / LIG beneficiaries through Central Nodal Agencies (CNAs) to PLI.

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Aadhar card of all members is mandatory to apply for CLSS subsidy under PMAY.

  EWS LIG
Annual Household Income Up to Rs. 3 Lakh Between Rs.3 lakh and Rs.6 lakh
Female Ownership Mandatory Mandatory
No Existing Pucca House Yes Yes
Dwelling Unit Carpet Area 30 sq. mts.* 30 sq. mts.*
Interest Subsidy 6.5% 6.5%
Maximum Subsidy Rs.2.67 Lakh Rs.2.67 Lakh
Maximum Loan Tenure for computation of subsidy 20 Years 20 Years
Loan Purpose Purchase/Construction/Extension Purchase/Construction/Extension

* The Beneficiary can build a house of a larger area, but interest subvention would be limited to first Rs.6 lakhs only.

Pradhan Mantri Awas Yojana FAQs

Pradhan Mantri Awas Yojana (Urban) or PMAY(U) was launched on 25th June 2015 with an objective to ensure housing for all in urban areas and ensure pucca houses to all eligible beneficiaries by 2022. The PMAY(U) comprises four components to include more number of people considering their income, finance and availability of land.:
  • “In-situ” Slum Redevelopment (ISSR)
  • Credit Linked Subsidy Scheme (CLSS)
  • Affordable Housing in Partnership (AHP)
  • Beneficiary-led individual house construction/enhancements (BLC)
The Credit Linked Subsidy Scheme offers an interest subsidy of up to Rs.2.67 lakh per house to the beneficiaries belonging to the Economically Weaker Section (EWS) and Low Income Group (LIG). As part of the scheme, beneficiaries availing housing loans for construction/purchase/enhancement of house from housing finance companies, banks or other institutions are eligible to get an interest subsidy at the rate of 6.5% for a tenure of 20* years or during the tenure of loan, whichever is lower.
Below are the eligibility terms for CLSS beneficiaries:
  • The annual household income of the beneficiary family shall not be more than Rs.3 lakhs and Rs.6 lakhs under EWS/LIG categories, respectively.
  • The beneficiary family should not own a pucca house in his/her or in the name of any member of his/her family in any part of India.
  • Female ownership/co-ownership in the house is a must.
  • The beneficiary family should not have availed of assistance under any housing scheme from the Government of India or any benefit under any scheme in PMAY.
  • The house is to be purchased/constructed in a statutory town as notified by the Ministry of Housing & Urban Affairs.
Below is the process of crediting the interest subsidy:
  • Step 1: The subsidy is released by the Central Nodal Agency (CNA) based on the disbursement made by Primary Lending Institution (PLI) to the borrower
  • Step 2: The subsidy is then credited by CNA to the IIFL Home Loans bank account
  • Step 3: IIFL Home Loans credits the subsidy to the borrower’s home loan account upfront by deducting it from the principal loan amount. The borrower pays the EMI on the remainder of the principal loan amount.
For instances where the construction of the house is stalled or not completed within a period of 36 months from the date of the first disbursement, the PLI recovers the subsidy from the beneficiary, and it is refunded to the Central Nodal Agency.
There is no limit on the loan amount as it ultimately depends on the credit due diligence of the PLI. However, the credit linked subsidy is calculated for loan amount of upto Rs.6 lakhs.
The Credit Linked Subsidy is calculated for a maximum tenure of 20 years or the actual tenure of the loan, whichever is less.
The Credit Linked Subsidy Scheme is not applicable for houses in rural areas.

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