Credit Linked Subsidy Scheme(CLSS)- Complete Guide

Credit Linked Subsidy Scheme(CLSS)

Credit linked subsidy scheme(CLSS) is a component of PMAY that aims at providing home loans at reduced EMIs to not only weaker sections but also the middle-income groups.

Pradhan Mantri Awas Yojana (Urban) mission launched on 25 June 2015 was a mission to provide housing to every urban area by the year 2022.

This mission provides central assistance to the implementing agencies through state/Union Territories and Central Nodal Agencies for providing residential solutions to all eligible families/beneficiaries against the validated demand for houses for about 1.12 crores.

According to PMAY (U) guidelines, the size of the house for economically weaker sections (EWS) could be up to 30 m² carpet area and States/Union Territories have the flexibility to increase the size of houses in consultation and approval of the ministry.

CLSS

What is Credit Linked Subsidy Scheme?

Credit linked subsidy scheme(CLSS) is a component of PMAY that aims at providing home loans at reduced EMIs to not only weaker sections but also the middle-income groups.

Credit Linked Subsidy Meaning

CLSS provides individuals purchasing a new affordable home a concession in interest of up to 3 to 4% on the amount borrowed, subject to some conditions. CLSS subsidy is calculated as the present value of interest saving on home loans over the entire tenure of the loan, capped for the maximum of Rs.2.35 lakhs. Get your CLSS tracker created on CLSS Awas Portal (CLAP) for the updates.

This subsidy is reduced from the principal dues of the borrower, reducing the amount of EMI’s payment.

To claim subsidy, the borrower has to submit a self-declaration on the income and the title of the property to be acquired, to the lender who gets the details verified.

Eligibility for CLSS

To avail CLSS benefits, an individual should belong to any of the below-listed income categories:-

  • Economically weaker section (EWS) or lower income group (LIG)with the income ranging between 3 lakhs- 6 lakh per annum.
  • Middle-income group 1st (MIG -I) – with the annual income within Rs.6 lakhs – 12 lakhs.
  • Middle- income group II (MIG -II)where the annual income of the borrower is within Rs.12 lakhs- Rs.18 lakhs.

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Other Eligibility Criteria for EWS/MIG Categories Include:-

  • There should be one female member included in property ownership.
  • A female member of the family must co-own the property.
  • The household/applicant should not possess any Pukka house in India.
  • The applicant should not have taken any government assistance under any other housing schemes previously.
  • Property location must be within the 2011 consensus statutory towns.

Update on the CLSS

Now the scheme has been extended till March 2021 to boost housing demand. The extension of CLSS meaning is expected benefit to 2.5 lakhs middle income families during this fiscal year of 2020. The updated guidelines are expected to create an investment of over Rs70, 000 crore rupees in the housing sector, besides numerous job opportunities.

The decision was announced by Finance Minister Nirmala Sitharaman where she said the government will launch a new scheme under the Pradhan Mantri Awas Yojana for migrant labor/urban poor to provide ease of living at an affordable rent.

Under this scheme, the government-funded housing in the cities is to be converted into affordable rental housing complexes (ARHCs) under the PPP mode through concessionaires.

Under the guidelines of Credit Link Subsidy Scheme, a home buyer can avail of an interest subsidy of up to Rs.2.7 lakh.

The scheme is run by the national housing bank (NHB) and housing finance companies (HFCs).

After the announcement of updated guidelines, the Centre has informed that it will send advisories to the real estate regulators to extend the completion timeline of the project registered under the RERA law by six months, treating the COVID-19 as an act of God/Force Majeure.

New Guidelines Regarding Increased Sizes and Salary of Applicant

The carpet size for affordable housing under PMAY for MIG-I and MIG-II has been increased by 33% (from 120 to 160 square meters and 150 to 200 square meters respectively). This means if the annual income of applicant is up to INR 18 lakh, up front interest subsidy can be availed of INR 2.3 lakh even for buying 2,100 sq ft flat or house with three or four BHKs. This will benefit people residing in Tier-3 and Tier -4 cities.

The carpet area of houses constructed for EWS and LIG should be up to 30 square metres and 60 metres respectively in order to avail this credit linked subsidy scheme. However, the interest allotment for applicant would be limited and applicable to first INR 6 lakh only.

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