Will govt’s home loan subsidy scheme benefit you?

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   The government this week announced guidelines for the implementation of Credit Linked Subsidy Scheme (CLSS) for home buyers in the middle income group (MIG) segment under Pradhan Mantri Awas Yojna (Urban). Here are the major pointers you should know about the scheme:

Who is eligible?

   All middle class home buyers with annual incomes of above Rs 6 lakh and up to Rs 18 lakh per year will be eligible for receiving interest subsidy on housing loans under Pradhan Mantri Awas Yojna (Urban).

What’s the benefit?

   Interest subsidy of 4% will be provided on housing loans of up to Rs 9 lakh of those with an income of Rs 12 lakh per year and of 3% on home loans of up to Rs 12 lakh of those earning Rs 18 lakh per year.

What’s excluded?

   Housing loans above Rs 9 lakh and Rs 12 lakh will be at non-subsidised rates.

Till when is the scheme applicable?

   The Credit Linked Subsidy Scheme (CLSS) for the Middle Income Group (MIG) was earlier valid till the end of December this year. However, the government in October 2017 extended the validity of interest subsidy benefit by 15 more months till March 2019.

Sizes of house applicable?

   The government in November 2017 increased the carpet area in the MIG I category of CLSS from the existing 90 square metre to up to 120 square metre and increasing the carpet area in respect of MIG II category of CLSS from the existing 110 square metre to up to 150 square metre, effective January 1, 2017. The CLSS for MIG covers two income segments – MIG-I from Rs 6 lakh to Rs 12 lakh per annum income and MIG-II from Rs 12 lakh to Rs 18 lakh per annum.

What’s the loan tenure?

   The tenure of home loans can be a maximum of 20 years or that preferred by the home buyer, whichever is lower.

Will you pay processing fee?

   No processing fee will be charged by banks or housing finance companies from the applicants under CLSS.

What’s the reduction in EMI?

   The interest subsidy of 4% under the scheme will bring down EMI by Rs 2,062 per month on a housing loan of Rs 9 lakh and interest subsidy of 3% will reduce the monthly outgo by Rs 2,019 on Rs 12 lakh loan, considering normal housing loan interest rate of 8.65%.

Who is getting preference?

   The scheme gives preference to women with overriding preference to widows, single working women, people from scheduled castes and scheduled tribes, backward classes, differently abled and transgender people.

What’s the budgetary allocation?

   The government has allocated Rs 1,000 crore in Union Budget this year for the CLSS (MIG) scheme.

Who’re the nodal agencies?

   NHB and Housing and Urban Development Corporation (HUDCO) have been designated as central nodal agencies for implementation of CLSS for both MIG and EWS/LIG who would reimburse interest subsidy to primary lending institutions.

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source: Economic times

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