Credit Linked Subsidy Scheme – Middle Income Groups

Planning to own a house and would like to receive the government benefit? Here are the details of Credit Linked Subsidy Scheme for Middle Income Groups which answers the most frequent questions you might have. See Ayushman Card – Pradhan Mantri Jan Arogya Yojana (PMJAY).

The government of India announced the PM Awaas Yojana scheme (Urban) in June 2015 with a vision of providing housing for all by 2022. CLSS is a central sector scheme initially introduced for Economically Weaker Sections (EWS) and Low Income Group (LIG). Later in December 2016, Ministry for Housing And Urban Alleviation introduced a new scheme for acquisition/ construction of a house (including re-purchase) to cater to the Middle Income Groups (MIG).

Guidelines for the CLSS MIG scheme PMAY (URBAN) component and initial guidelines for the scheme are announced on March 11, 2017.

What is Middle Income Group (MIG)

Households with annual income between INR 6,00,001 and INR 18,00,000 are considered to be in Middle Income Group. A beneficiary family can comprise couple and unmarried children however an earning adult married/unmarried can be a separate household.

MIG groups are divided into two sub-categories :

Middle Income Group (MIG) – I:

MIG – I households are defined as households having an annual income of Rs.6,00,001 (Rupees Six Lakh One) to Rs.12,00,000 (Rupees Twelve Lakh).

Middle Income Group (MIG) – II:

MIG – II households are defined as households having an annual income of Rs.12,00,001 (Rupees Twelve Lakh One) to Rs.18,00,000 (Rupees Eighteen Lakh).

Eligibility Criteria For Credit Linked Subsidy

Who are eligible

  • The beneficiary family should not own a pucca house either in his/her name or in the name of any member of his/her family in any part of India.
  • In the case of a married couple, either of the spouses or both together in joint ownership will be eligible for a single house
  • An adult earning member irrespective of his/her marital status can also be treated as a separate household & avail subsidy separately for their 1st home. Widows & divorcees can apply for the subsidy.
  • A beneficiary family should not have availed of central assistance under any housing scheme from Government of India.
  • There is no age limit mentioned for availing the subsidy. If you are eligible for applying for a home loan and meet the eligibility criteria, you can apply for the subsidy
  • *For CLSS MIG, a woman need not be the owner/co-owner of the property

What can be bought or build

  • MIG 1 – Carpet area of the house or apartment should be under 120 Sq Metres
  • MIG 2 – Carpet area of the house or apartment should be under 150 Sq Metres
  • CLSS can be availed for construction of house or  acquisition of house (including repurchase)
  • The construction/extension must be completed within 36 months
  • All Statutory Towns as per Census 2011 and towns notified subsequently will be eligible for coverage under CLSS for MIG
  • Houses constructed under CLSS for MIG should conform to the norms and standards provided in extant guidelines on construction and structural safety in the country.

Subsidy Calculation

Subsidy Interest Rate

  • MIG 1 – Subsidy is calculated at a rate of 4% on a maximum loan amount of 9 lakhs
  • MIG 2 – Subsidy is calculated at a rate of 3% on a maximum loan amount o 12 lakhs
  • Banks can sanction loans more than this amount but subsidy calculation is restricted to 9 lakhs

The maximum subsidy a beneficiary can receive would be up to Rs 2.40 lacs approximately

Below is a summarized version of the credit subsidy eligibility and benefits  for middle-income sections.

Loan Tenure

  • Under CLSS interest subsidy is calculated for a loan tenure up to 20 years or term of the loan whichever is lower
    • if the loan is scheduled to be closed in 15 years, the subsidy is given only for 15 years.
    • If the loan is closed in 25 years, the subsidy is given for 20 years
  • If the loan is prepaid before the actual calculation tenure is completed, the beneficiary is not eligible for the complete subsidy amount previously calculated

Home Loan Requirements

  • The home loan sanction and disbursement should be after 01-Jan-2017
  • You cannot avail the benefit provided under CLSS without applying for a home loan. It is compulsory that you apply for a home loan at a Primary Lending Institution
  • Housing loans to be secured from Scheduled Commercial Banks, Housing Finance Companies, Regional Rural Banks, State Cooperative Banks, Urban Cooperative Banks, Small Finance Banks, Non-Banking Financial Company-Micro Finance Institutions (NBFC MFIs) or any other institution as may be identified by the MoHUPA. The beneficiary should check with the financial institution if he would be eligible for the subsidy when he takes a loan from the Institution.

Subsidy processing guidelines

  • Interest subsidy will be credited upfront to the loan account of beneficiaries through PLIs reducing the monthly EMIs and saving money for the beneficiaries. The money will not be credited to your bank account e.g. savings account but will be deposited to the lending institution to reduce the home loan principle you have with the institution
  • It would take approximately 3 months after application to receive the subsidy
  • The builders or real estate developers do not have a role in the scheme. It is the beneficiary who met eligibility criteria who submit the required documentation and apply for the subsidy

GST charged

Effective the 25 Jan 2018, GST of 8% is charged on homes under construction or new applications

How to apply

Click here to know the details of submitting an application and to download the required forms.

Check your eligibility and make sure you do not miss out on the benefits if you are eligible.

CLSS Toll-Free Helpline Numbers

  • NHB: 1800-11-3377, 1800-11-3388
  • HUDCO: 1800-11-6163
  • SBI : 1800-11-2018