With the introduction of Pradhan Mantri Awas Yojana (PMAY) in 2015, the Government of India has paved the way for people to realize their dream of owning a house. As the name suggests, Pradhan Mantri Awas Yojana – Housing for All by 2022 was launched by the Government of India to empower the poor rural and urban people to have a house of their own. PMAY works through 4 components – Rehabilitation of slum areas, Affordable housing by partnerships, Credit Linked Subsidy Scheme (CLSS) and Beneficiary-led individual house construction. What is Credit Linked Subsidy Scheme? What is the Eligibility Criteria for availing home loan under PMAY? How to avail subsidy under CLSS of PMAY?

What is Credit Linked Subsidy Scheme (CLSS)?

CLSS is the component of PMAY that deals with providing interest subsidy on home loans. Under CLSS, interest subsidy on home loans is provided to the eligible individuals/households of the weaker sections of the society for new construction and enhancement.

What is the Eligibility Criteria for availing home loan under PMAY or Pradhan Mantri Awas Yojana?

There are some basic eligibility rules for availing the benefits of CLSS of PMAY. Following categories of people are eligible for PMAY :

1. Individuals belonging to the Lower Income Groups (LIG) of the society with income not exceeding Rs.6 lakh per annum.
2. Individuals belonging to the Economically Weaker Sections (EWS) of the society with income not exceeding Rs.3 lakh per annum.
3. Individuals belonging to Middle Income Group (MIG1) of the society i.e. individuals with income not exceeding Rs.12 lakh per annum.
4. Individuals belonging to Middle Income Group (MIG2) of the society i.e. individuals with income between Rs.12 lakh to Rs.18 lakh per annum.
5. Individuals/households belonging to Scheduled Castes, Scheduled Tribes, and Other Backward Class.
6. Women belonging to the EWS and LIG of the society.

Apart from the above mentioned financial criteria, an individual shall also satisfy the below-mentioned criteria –

1. The individual/household should not own a pucca house.
2. The individual/household should not have availed earlier any other housing scheme of Central Government of India.

How to avail subsidy under CLSS of PMAY or Pradhan Mantri Awas Yojana?

The process of availing subsidy under CLSS of PMAY is very simple and easy.  The home loan under PMAY can be availed from approved banks and financial institutions. PMAY works through two central nodal agencies – National Housing Bank (NHB) and Housing Development Corporation (HUDCO).

These agencies channelize funds to the approved lending institutions who in turn transfer the funds to the eligible applicants. The entire procedure has 5 easy steps –

1. Loan Application – The first step is to make a home loan application to a lending institution. The lending institution must have signed a Memorandum of Understanding (MOU) with the NHB or HUDCO for providing this subsidy.
2. Determination of Loan eligibility – The next step involves the amount of loan to be sanctioned based on the application and eligibility of the applicant.
3. Approval – The loan application is forwarded to the central nodal agency for its approval.
4. Transfer of Funds – If the loan application gets approved, the subsidy amount is transferred by the central nodal agency to the lending institution.
5. Deposit of Subsidy – Finally the credit linked subsidy is deposited in the applicant’s loan account by the lending institution.

How much loan amount one is eligible for?

Pradhan Mantri Awas Yojana eligibility for a home loan is based on the annual income and category of the individual/household.  It would be easier to understand it with a table:

Hence, it is clear that the subsidy amount is deducted from the overall loan amount resulting in a reduced EMI.

The Bottom Line

With such a simple process and easy access to home loans, Pradhan Mantri Awas Yojana has undoubtedly made it simpler for the citizens of India to have their own houses.