Credit Linked Subsidy Scheme (CLSS) 2023 - Status & Meaning

Prime Minister Narendra Modi unveiled the Pradhan Mantri Awas Yojana project in 2015. By 2022, the Indian government hopes to offer cheap housing to the country's poor urban population. The Credit Linked Subsidy Scheme (CLSS), which aims to make housing accessible for everyone, is a key component of this program, which goes by the slogan "Housing for all." It also provides a subsidy for survey-driven independent house construction or repair.

The only program that will be executed as a central sector scheme among the four emphasis areas stated above is CLSS. The remaining plans will be carried out as sponsored plans. The Government of India wants to increase the flow of credit into institutions through the Credit Linked Subsidy Scheme to help our nation's urban poor population with their housing demands.

Two central nodal organizations in India, Housing Urban Development Corp and National Housing Bank will administer the Credit Linked Subsidy Scheme. This program will concentrate on the demand components of the affordable housing financing segment and increase the credit flow necessary to meet housing demands.

Economically Weaker Groups or Low-Income Groups seeking home loans from financial institutions and banks involved in the Pradhan Mantri Awas Yojana Scheme may take advantage of the benefits under the CLSS. For residential development or to add a room to an existing home, borrowers may qualify for credit-linked subsidies.

The female head of the household must be listed as the registered owner of any homes built or acquired using benefits from the Pradhan Mantri Awas Yojana program. The beneficiaries can choose to register it under both the male and female family heads' names. In unique circumstances where there is not a female head of household, the home

Additionally, it must be the beneficiary's first home. The beneficiary family should not have a brick house in any region of India in their name or the name of any relative.

What Does CLSS Refer To?

The only PMAY (Urban) program the central government implements is the CLSS, or Credit Linked Subsidy Scheme. The many beneficiaries of this scheme receive a direct government subsidy on the interest rates on housing loans.

Who Are The Plan's Beneficiaries?

The CLSS plan is available to the four groups of people according to annual household income:

• EWS or Economically Weaker Section: Families making less than Rs. 3 lakh annually

• Low Income Group, or LIG households making between Rs. 3 lakh and Rs. 6 lakh per year

• Households in the MIG I, or Middle Income Group I, range in yearly income from Rs. 6 lakh to Rs. 12 lakh.

• Households in the MIG II, or Middle Income Group II, range in annual income from 12 to 18 lakhs rupees.

How Is CLSS Put To Use?

Are you wondering how a credit-linked subsidy program operates? We got your back.

Based on the group of beneficiaries they fall under, this program enables homebuyers to receive interest rate reductions of 3-6.5% on the loan balance. The maximum amount of this subsidy, computed over the whole loan term, is Rs. 2.67 lakhs.

The given concession is directly subtracted from the remaining principal balance of your loan. The magnitude of the EMIs decreases together with the principal amount. All qualified borrowers must disclose their income and provide the title to the property they seek to purchase to be eligible to receive the subsidy. The subsidy is credited to your loan account and lowers your EMIs once your lender has confirmed the information.

CLSS for Low-Income Groups(LIG) and the Economically Weaker Section (EWS)

The Pradhan Mantri Awas Yojana - Credit Linked Subsidy Scheme's main goal is to assist the urban poor by enhancing the flow of institutional credit to satisfy their housing demand. Financial institutions and banks will be required to offer economically disadvantaged and low-income groups who apply for home loans an interest subsidy of 6.5% for 20 years or for the loan's term, whichever is shorter. This interest rate reduction will be applied to the beneficiary's loan account during the initial phase of the loan by the lending institution, lowering their Equated Monthly Installments (EMIs) immediately.

Economically Weaker Sections may borrow money to build a new home or to expand their current home by building a room, kitchen, or balcony. Benefit recipients from the Economically Weaker Sections may earn up to Rs. 3 lakh per year. Beneficiaries who earn between Rs. 3 lakh and Rs. 6 lakh per year are included in the Low-Income Group group.

The carpet area for Lower Income Groups can be up to 60 square meters, while the carpet area for Economically Weaker Sections can be up to 30 square meters. Additionally, precedence will be given to women, Scheduled Tribes, Scheduled Castes, underprivileged classes, minorities, disabled individuals, and transgender individuals regarding EWS and LIG.

Middle Income Group CLSS (MIG)

There are two different groups of beneficiaries within the Middle-Income Group. People having an annual income of Rs. 6 lakh to Rs. 12 lakh p.a. are covered by the first set of MIG-I. 

The second group, MIG-II, includes those whose annual income ranges from Rs. 12 lakh to Rs. 18 lakh. All who collapse under MIG-I and MIG-II will receive a rate of interest subsidy of 4% and 3%, respectively. The max loan term for both groups of beneficiaries is 20 years. For MIG-I and MIG-II, the maximum loan amount is Rs. 9 lakh and Rs. 12 lakh. Additionally, for both MIG-I and MIG-II, the discount rate for the Present Net Value (NPV) is 9%.

The carpet area was fixed at 90 square meters for MIG-I and 110 square meters for MIG-II when CLSS was introduced. The Cabinet recently raised the carpet area for MIG-I from 90 square meters (968.752 square feet) to 120 square meters (1291.668 square feet). Additionally, the carpet size for MIG-II was enlarged from 110 square meters (1184.03 square feet) to 150 square meters (1614.585 square feet).

Examples of PMAY CLSS Instances and PMAY Eligibility for CLSS

• The first scenario is when a married person leases a home while their parents own one. Do they qualify for the PMAY CLSS program?

Yes, a married couple who rents their home and whose parents own a home is qualified for the PMAY CLSS. But, a married pair is recognized as a separate household and might obtain a single home either jointly or alone on their own.

• Scenario 2: If the children, regardless of their marital status, are living with their parents in a home that is either their own or rented out in the same or a different city. Do these kids qualify for PMAY CLSS?

The youngsters need to work to qualify for PMAY CLSS funds. No residence should be owned in the children's names. However, it's acceptable to own real estate in their parents' names.

• Third-party scenario: If the working child relocates to another location for employment and desires to buy a home there. They qualify for a subsidy, right?

They qualify for subsidies because they are viewed as individual earning members; hence the answer is yes. Female ownership is unnecessary if the unmarried son's salary falls into the EWS/LIG category.

• Case 4: If a woman owns a home both before and after marriage, and if the husband buys a home and files for PMAY financial assistance through CLSS. The husband is qualified.

No, the husband is not eligible for CLSS benefits because his wife already owns a home. The husband is not eligible for assistance with a second home.

How to Access the PMAY Subsidy Program?

• If you want to enrol in the Home Loan Credit Linked Subsidy Scheme, you must first determine your eligibility.

• You must get in touch with the financial institutions or banks taking part in the PMAY initiative if you fulfil all the eligibility requirements.

• Complete the PMAY Home Loan Credit Linked Subsidy Application form and deliver it to the lender along with the required paperwork.

• The housing loan money will be transferred to your bank account upon verification.

• Your lender will contact the nodal organizations and start the process of collecting interest subsidy after the loan has been issued.

• After validation, the interest subsidy will be added to your loan account, and the loan balance will be changed to reduce your Equated Monthly Installment.

Helpline For The Credit Linked Subsidy Scheme

Some Of The Key Characteristics Of CLSS

• PMAY Launch Date PMAY, introduced in 2015 by the Ministry of Housing and Urban Poverty Alleviation, includes the CLSS interest subsidy program.

• For the purpose of meeting the conditions for home construction, purchase, repair, or modification, anyone from the EWS/LIG sectors may apply for the program.

• In essence, the CLSS program under PMAY makes home loans accessible and cheap for those from economically disadvantaged groups in society.

• Applicants are given a subsidy on the interest portion of their house loans under the program, based on their income group.

• The Cabinet has enhanced the MIG-I carpet area from 90 square meters to 120 square meters. Additionally, the 110 square meter carpet space for MIG-II was enlarged to 150 square meters.

• By providing an interest subsidy, the Credit Linked Subsidy Scheme (CLSS), a perk of the Pradhan Mantri Awas Yojana, aims to assist India's Middle-Income Groups, Economically Weaker Sections, and Lower-Income Groups by reducing their home loan EMIs by over Rs. 2,000 per month.

• In order to assist the nodal agencies in executing the PMAY Urban Scheme, over 70 lending institutions, including 45 Housing Finance Companies and 15 Scheduled Banks, have stepped forth and inked Memoranda of Understanding with them.

PMAY Subsidy Deadline 2022: Qualifications

Once you are acquainted with the deadline for the PMAY subsidy, it is critical to understand the requirements:

• Age: at least 18 years old

• Economically Weaker Section (EWS), characterized by an annual household income of up to Rs. 3 lakh; or the Low-income Group (LIG), characterized by an annual household income of between Rs. 3-6 lakh. You are not eligible if your annual household income exceeds Rs. 18 lakh.

• Beneficiaries: a unitary household consisting of a husband, wife, and unmarried children

• Property: The property of choice must consist of a single unit or a unit in a multi-story building with all necessary amenities.

• For EWS, the carpet area must be less than 30 m2, and for LIG, it must be less than 60 m2.

CLSS Processing Charges

PLIs will not charge any processing fees to applicants using the CLSS program. Making it simple for applicants to budget their housing loan EMIs and take advantage of this program.

How Can You See The Status Of Your CLSS PMAY?

The methods listed below allow you to check the status of your CLSS PMAY application online:

Step 1: Go to www.PMAYmis.gov.in and login 

Step 2: Choose the "Citizen Assessment" tab at the top after logging in.

Step 3: At the bottom of the menu, click "Track Your Assessment."

Step 4: You have the choice between "By Name, Father's Name" and "ID Type or By Assessment ID."

Step 5: Select one of the two alternatives to find out the status of your application.

Step 6: Provide the State Name, District Name, City Name, Your Name, Your Father's Name, and Mobile Number for the first selection.

Step 7: You must input information, including your Assessment ID and Mobile Number if you prefer to check the progress of your PMAY application by supplying your Assessment ID.

Step 8: Click the Submit button to monitor your PMAY status for both selections.

How Soon to Expect to Receive a PMAY Subsidy?

Once the validation is finished, it usually takes 3–4 months to get the subsidy amount if you have qualified for the CLSS subsidy.

The government's PMAY credit-linked subsidy scheme is a fantastic effort to lower the cost of a home loan. The beneficiary can continue with the pending loan repayment once the subsidy amount has been credited to their account, lowering the balance owed. You can consider constructing a permanent home for yourself and your loved ones now that the government is providing assistance to the economically poorer segments of society. The interest rate on home loans has decreased to 6.90%.

Frequently Asked Questions (FAQs)

Q. How is the interest subsidy going to be credited?

The borrower will receive an upfront interest subsidy credit and have lower monthly payments for the remaining loan balance.

For instance, your loan would be lowered by Rs 2 lakh if you took out a Rs 6 lakh loan and received a Rs 2 lakh subsidy.

Your loan would then be decreased to Rs 4 lakh, and you would continue to make monthly payments on this dropped loan amount for the remainder of the loan term.

Q. Is the cost of the property that can get advantages under the Credit Linked Subsidy Scheme limited?

No. The cost of the property is not restricted. Still, the subsidy is only available for the loan amount specified against each type, and any further sums will have non-subsidized interest rates.

Q. How Is An Interest Substantiation Calculated Under CLSS?

For this, we can use the multiple free online mortgage payment calculator.

Suppose you have a home loan of Rs. 24 lakh with a 20-year payback period and a 12% interest rate. Your Installment will be Rs 26,426.00 as a result.

But, if you qualify for the MIG-II group's CLSS subsidy, you would be qualified for a subsidy on loan worth Rs 12 lakh. Consequently, you will be required to pay 3% interest on this sum.