PMAY CLSS - Check How the Credit Linked Subsidy Scheme (CLSS) works

Two central nodal agencies in India, Housing and Urban Development Corp and National Housing Bank, will implement the Credit Linked Subsidy Scheme. Apart from pumping the credit flow required to meet the housing needs, this scheme will also focus on the demand aspects of affordable housing finance segment.

Economically Weaker Sections and Low-Income Groups can avail CLSS benefits when they seek housing loans from financial institutions and banks participating in the Pradhan Mantri Awas Yojana Scheme. Borrowers can Credit Linked Subsidy for new construction or for adding a room to their existing house.

The Pradhan Mantri Awas Yojana scheme requires that houses constructed or acquired with its benefits be registered in the name of the female head of the household. The beneficiaries have an option to register it jointly in the name of the male and female head of the family. In special cases where is not no female head in the family, the house can be in the name of a male head of the family.

Additionally, the beneficiary must ensure that this is their first owned house. The beneficiary family should not own a pucca house in his/her or in the name of any member of his/her family in any part of India.

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

Pradhan Mantri Awas Yojana’s Credit Linked Subsidy Scheme helps urban poor by providing 6.5% interest subsidy on housing loans.

The lending institution will credit the interest rate subsidy to the beneficiary’s loan account at the start of the loan, reducing their Equated Monthly Installments (EMIs) from the very beginning.

Economically Weaker Sections can use the borrowed funds to either construct a new house or add a room, kitchen, or balcony to their existing house. The beneficiaries under Economically Weaker Sections can have annual income up to Rs.3 lakh. Also, beneficiaries with an annual income of Rs.3 lakh to Rs.6 lakh fall under the Low-Income Group category.

The government prioritizes women, STs, SCs, backward classes, minorities, people with disabilities, and transgenders within EWS and LIG categories.

CLSS for Middle Income Group (MIG)

Under the Middle-Income Group, there are two sets of beneficiaries. The first set MIG-I covers people with an annual income of Rs.6 lakh to Rs.12 lakh p.a. The second set called MIG-II covers people who fall in the income group of Rs.12 lakh to Rs.18 lakh p.a. An Interest rate subsidy of 4% and 3% will be given to those who fall under MIG-I and MIG-II respectively. For both sets of beneficiaries, the maximum tenure of loan can go up to 20 years. The maximum loan amount can go up to Rs.9 lakh for MIG-I and Rs.12 lakh for MIG-II. Also, the discount rate for Net Present Value(NPV) is 9% for both MIG-I and MIG-II.

When CLSS was introduced, the carpet area was set at 90 square metres for MIG-I and 110 square metres for MIG-II. Recently, the Cabinet increased the carpet area from 90 square metres (968.752 sq ft) to 120 square metres (1291.668 sq ft.) for MIG-I. The carpet area for MIG-II was also increased to 150 square metres (1614.585 sq ft) which were 110 square metres (1184.03 sq ft) previously.

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Benefits of CLSS Under PMAY

The Credit Linked Subsidy Scheme (CLSS) under PMAY provides interest subsidies on home loans, helping eligible homebuyers reduce their overall borrowing costs. The benefits vary based on the applicant's income category. 

1. MIG-I (Middle Income Group I) 

Eligibility 

• Annual household income between Rs.6 lakh and Rs.12 lakh.  

• House carpet area up to 160 sq. metres.  

Benefits 

• Interest subsidy of up to 4%.  

• Applicable on a home loan amount of up to Rs.9 lakh.  

2. MIG-II (Middle Income Group II) 

Eligibility 

• Annual household income between Rs.12 lakh and Rs.18 lakh.  

• House carpet area up to 200 sq. metres.  

Benefits 

• Interest subsidy of up to 3%.  

• Applicable on a home loan amount of up to Rs.12 lakh.  

3. LIG and EWS (Lower Income Group and Economically Weaker Section) 

Eligibility 

• Annual household income between Rs.3 lakh and Rs.6 lakh.  

• House carpet area up to 60 sq. metres.  

• A female family member must be the owner or co-owner of the property.  

Benefits 

• Interest subsidy of up to 6.5%.  

• Applicable on a home loan amount of up to Rs.6 lakh.  

4. Loan Tenure Benefit 

• The interest subsidy is available for home loans with a tenure of up to 20 years across all eligible categories.  

• The subsidy amount is credited directly to the loan account, reducing the outstanding principal and overall repayment burden. 

How Does CLSS Work? 

Under the Credit Linked Subsidy Scheme (CLSS), eligible homebuyers receive an interest subsidy on a specified portion of their home loan, reducing the overall borrowing cost. 

Key Points to Understand 

• The subsidy is calculated based on the applicant's income category and the prescribed loan limit under the scheme.  

• The benefit is available only up to the maximum loan amount eligible for subsidy, even if the actual loan amount is higher.  

• Similarly, the subsidy is applicable only up to the specified loan tenure limit, regardless of the actual loan tenure chosen.  

• The subsidy amount is credited upfront to the loan account, reducing the outstanding principal and lowering the effective loan burden.  

Example 

• Suppose you take a home loan of ₹9 lakh for 20 years at an interest rate of 9%.  

• If you are eligible under the MIG-I category, you can receive an interest subsidy of 4%.  

• This subsidy can significantly reduce the effective cost of borrowing and lower the overall interest payable.  

Important Considerations 

• If your loan amount exceeds the eligible subsidy limit, the excess amount will be charged at the lender's regular home loan interest rate.  

• If your loan tenure exceeds the maximum tenure eligible for subsidy, the subsidy benefit will apply only up to the prescribed tenure limit.  

• Any loan amount or tenure beyond the eligible limits will continue at the standard applicable interest rates. 

PMAY CLSS Helpline Numbers

You can call the CLSS toll-free helpline numbers for any enquiries or concerns regarding CLSS.

The CLSS toll-free number for Housing and Development Corporation (HUDCO) is 1800116163.

The CLSS toll-free numbers for National Housing Bank (NBC) are 1800113377 and 1800113388.

How to Avail PMAY CLSS Subsidy

Eligible homebuyers can receive the PMAY interest subsidy through their lending institution without having to apply separately. Once you meet the eligibility criteria and submit the required declaration, the lender handles the subsidy claim process on your behalf. 

Steps to Claim PMAY Subsidy 

• Ensure your home loan meets the PMAY eligibility requirements.  

• Submit a declaration confirming your eligibility under the scheme.  

• The lending institution will verify your details and initiate the subsidy claim.  

• The lender will complete all necessary formalities with the designated nodal agency.  

• Upon approval by the nodal agency, the subsidy amount is credited directly to your home loan account.  

• The credited subsidy reduces the outstanding loan principal, lowering your overall repayment burden.  

Note: The subsidy is processed through the lender, so borrowers are not required to submit a separate claim application. 

Key Features of PMAY Credit Linked Subsidy Scheme

• The Credit Linked Subsidy Scheme (CLSS) is a benefit under the Pradhan Mantri Awas Yojana which focuses on helping the Middle Income Groups, Economically Weaker Sections, and Lower-Income Groups in India by bringing down their housing loan EMIs by over Rs.2,000 per month by offering an interest subsidy.
• CLSS scheme is effective from 1 January 2017. Those who were sanctioned home loans and whose applications are under consideration since the beginning of the year will be eligible for interest subsidy.
• Over 70 lending institutions which include 45 Housing Finance Companies and 15 scheduled banks have come forward and signed the Memoranda of Understanding with the nodal agencies showing their support in implementing the PMAY Urban Scheme.
• To be eligible to avail a housing loan under CLSS, the beneficiary family should not own a pucca house in his/her or in the name of any member of his/her family in any part of India.
• Economically Weaker Sections and Low-Income Groups who are seeking for housing loans from financial institutions and banks will be eligible for an interest subsidy of 6.5% for a period of 20 years or for the tenure of the loans, whichever is lower.
• This interest rate subsidy will be credited during the initial stage of the loan to the beneficiary's loan account through the lending institute which will lower their Equated Monthly Installments (EMIs).
• The funds borrowed under CLSS can be used to construct a new house or to add a room, kitchen, or balcony to their existing house.
• The beneficiaries under Economically Weaker Sections can have annual income up to Rs.3 lakh. Also, beneficiaries with an annual income of Rs.3 lakh to Rs.6 lakh fall under the Low-Income Group category.
• The carpet area for Economically Weaker Sections can go up to 30 square metres and the carpet area for Lower Income Groups can go up to 60 square metres.
• Preference will be given to women, Scheduled Tribes, Scheduled Castes, backward classes, minorities, people with disabilities, and transgenders.
• Under the Middle-Income Group, there are two sets of beneficiaries. The first set MIG-I covers people with an annual income of Rs.6 lakh to Rs.12 lakh p.a. The second set called MIG-II covers people who fall in the income group of Rs.12 lakh to Rs.18 lakh p.a.
• An Interest rate subsidy of 4% and 3% will be given to those who fall under MIG-I and MIG-II respectively. For both sets of beneficiaries, the maximum tenure of loan can go up to 20 years.
• The maximum loan amount can go up to Rs.9 lakh for MIG-I and Rs.12 lakh for MIG-II. Also, the discount rate for Net Present Value(NPV) is 9% for both MIG-I and MIG-II.
• Recently, the Cabinet increased the carpet area from 90 square metres to 120 square metres for MIG-I. The carpet area for MIG-II was also increased to 150 square metres which was 110 square metres previously.

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