How to Apply for PMAY Home Loan Subsidy?

The Pradhan Mantri Awas Yojana is a scheme introduced by the Government of India which targets to provide housing for all by March 2022. CLSS or Credit Linked Subsidy Scheme for LIG/EWS or MIG (I&II) is a significant vertical of PMAY intending to make owning homes easier for:

Economically Weaker Section (EWS)
Low Income Group (LIG)
Middle-Income Group 1 (MIG-I)
Middle-Income Group 2 (MIG-II)

In order to avail the PMAY subsidy, you must be eligible for it. Except for CLSS, the other three components are In-Situ Slum Redevelopment, Beneficiary Led Construction and Affordable Housing in Partnership.

The Credit Linked Subsidy Scheme (CLSS) for MIG, called as CLSS for MIG I and MIG II, was initially approved for implementation for the year 2017 and extended up to March 2020. However, the government on May 14, 2020, announced the extension of the deadline again for the affordable housing CLSS scheme for 1 year, i.e. till March 2021. The scheme offers subsidized home loan interest rates depending on your household income. In this article, we have curated all the details of this scheme for you, including how to Get a home loan subsidy under PMAY.

Eligibility for Pradhan Mantri Awas Yojana Subsidy

As mentioned earlier also, the interest subsidy on home loan by the government of India is available for 3 income groups – EWS, LIG, and MIG. The features of this scheme can be divided according to the financial backgrounds of households.

EWS or Economically Weaker Section Applicants

The annual income of the household should be maximum up to Rs. 3 Lakh.
The home loan amount can be up to Rs. 6 Lakh on which subsidy is calculated
Rate of interest subsidy %p.a. – 6.50%.
The carpet area of the dwelling should be up to 30 square metres.

LIG or Lower Income Group Applicants

Yearly income of the household should be maximum up to Rs. 3 Lakh.
The home loan amount can be up to Rs. 6 Lakh on which subsidy is calculated
Rate of interest subsidy % p.a. – 6.50%.
The carpet area of the dwelling – up to 60 square metres.
Applicants belonging to EWS and LIG categories can avail a maximum home loan subsidy of up to Rs. 2.67 Lakh.

Middle Income Group or MIG I Applicants

The annual income of the household should be at least Rs. 6 Lakh to up to Rs. 12 Lakh.
The home loan amount can be up to Rs. 9 Lakh on which subsidy is calculated
Rate of interest subsidy % p.a provided – 4%.
The house’s carpet area can be up to 120 square metres.

MIG II category Applicants

The annual income of the household should be from Rs. 12 Lakh to up to Rs. 18 Lakh.
The home loan amount can be up to Rs. 12 Lakh on which subsidy is calculated
Rate of interest subsidy % p.a provided – 3%.
The carpet area of the house should be up to 150 square metres.
Candidates that are eligible from MIG I & MIG II categories can avail a maximum subsidy of up to Rs. 2.35 Lakh on home loan interest

Note: Carpet area is excluding inner wall’s thickness and is the actual area within the walls where you can lay a carpet. It also excludes the area of the common spaces like stairs, lobby, etc.

Other requirements apart from annual income

For EWS/LIG groups, a female member must be the owner or co-owner of the house (with terms and conditions applied).
No member of the family should have a pucca house of their own anywhere in this country. The allotted property must be their 1st house.
The beneficiary family should not have availed any other government-backed housing scheme before.
The family availing the CLSS benefits should entail the husband and wife, along with their unmarried children (son/daughter).
In case the applicants are unmarried, either or both the spouses can qualify to avail subsidy on home loan by the government on a single property.
An adult earning member of the household is considered as an independent beneficiary of this home loan interest subsidy.
A subsidy on home loan interest rate is also applicable on the funds used for the purchase, construction or renovation of a residential property. However, applicants belonging to MIG I and MIG II category can only use the loan amount to purchase a house.
The maximum tenure of a home loan must be 20 years under the PMAY CLSS scheme

How to get a home loan subsidy under PMAY

The Pradhan Mantri Awas Yojana Subsidy is provided through 2 central nodal agencies – Housing & Urban Development Corporation (HUDCO) and NHB. These government institutions channelize the subsidy to the pre-listed or prime lending institution (PLIs), which further help the eligible candidates to avail the interest subsidy benefit. Eligible applicants can directly apply for a home loan under CLSS with these PLIs. There are approx 70 financing organizations that are associated with NHB and HUDCO. After completing the PMAY application procedure, you need to check the PMAY list of beneficiaries to confirm whether your application has been accepted. You can do it by visiting the official website of PMAY.

How to claim PMAY interest subsidy benefit?

The lender sends the required details to the National Housing Bank (NHB) for data validation and another checking once your home loan is disbursed
NHB after thorough checking approves the subsidy to eligible borrowers.
The subsidy amount is then disbursed to the lender for all eligible borrowers.
Once the lender receives the amount disbursed by NHB, it will credit the same to the respective home loan account of the borrower and will be adjusted in the loan accordingly.

On a closing note

Pradhan Mantri Yojana has been a prominent scheme in providing affordable housing. One interesting thing since the inception of it is, the role of this scheme is not only confined to making housing accessible and affordable to all irrespective of their financial stability but has also provided ample job opportunities in the real estate sector. We hope that you now have a fair idea of eligibility and how to claim PMAY home loan subsidy after reading this article.