How to avail the home loan subsidy

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   The government is giving a range of subsidies on interest payment to home loan borrowers, with a household income of up to Rs 18 lakh.

Here’s how to avail this benefit.

The government is determined to give a boost to the mission of ‘Housing for All’ by 2022 and also address the urban people’s housing requirement while reviving the real estate sector under the Pradhan Mantri Awas Yojana (PMAY) scheme. For the Middle Income Group (MIG), the government has launched the Credit Linked Subsidy Scheme (CLSS) for a period of one year starting from January 1, 2017.Under CLSS, the government gives a range of subsidies on interest payment to home loan borrowers, with a household income of up to Rs 18 lakh. As such, for those looking to own a home of your own under PMAY scheme, only seven months are now left to finalise the deal.

 

   The eligibility condition under PMAY is that the person who applies for the scheme should not own a pucca house either in his or his family member’s name. To avoid duplication, beneficiary family members have to provide their Aadhaar numbers while applying for the loan.

   The MIG category comprises two slabs. The MIG-I comprises households having an annual income from Rs 6 lakh up to Rs 12 lakh. The MIG-II comprise households having an annual income between Rs 12 lakh up to Rs 18 lakh. So, effectively anyone earning between Rs 6 lakh and Rs 18 lakh per annum can avail the benefits of subsidised loans provided other conditions are met

    Under PMAY, the area of the house is different for all categories but it’s the carpet area that is to be looked at. For MIG-I, the carpet area is to be 90 sq mt (968.752 sq ft) and for MIG II category it is to be 110 sq mt (1184.03 sq ft). Carpet area is the area enclosed within the walls i.e. actual area to lay the carpet. This area does not include the thickness of the inner walls. This move has made affordable housing scheme accessible to many people living in urban areas now.

    In the MIG-I category, individuals will get 4 per cent interest subsidy on a loan amount up to Rs 9 lakh, and in the MIG-II slab category, individuals will get a 3 percent subsidy on a loan amount up to Rs 12 lakh. Interest subsidy will be credited upfront to the loan account of the beneficiaries through lending institutions, resulting in reduced effective housing loan and equated monthly instalment (EMI). For all slabs, the scheme will apply to loans with tenure of up to 20 years. Also, there is no cap on the loan amount. If one needs an additional loan, the lender will provide it but the additional loans beyond the subsidised loan amount will be at a nonsubsidised rate.

   A person can avail PMAY linked loans from any primary lending institutions such as scheduled commercial banks, housing finance companies, regional rural banks, nonbanking financial company etc. There will not be any processing charge for eligible housing loan amount as per income criteria under the scheme.

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