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Credit Linked Subsidy Scheme

Credit Linked Subsidy Scheme or CLSS comes under the purview of PMAY and is directly executed by the Centre.  The primary mission of this scheme is to help expand institutional credit flow so that the economically backward segment of the urban population can meet their housing needs quickly. 

Following is an elaborate look at the fundamental concept, eligibility criteria, and importance of this scheme in general. With such information at their disposal, one will gain a fair idea about CLSS and its usefulness. 

What is Credit Linked Subsidy Scheme? 

CLSS is a component of the Pradhan Mantri Awas Yojana and aims to extend subsidised home loans to both lower and middle-income groups in the country. Typically, under this scheme, eligible applicants are entitled to receive a concession on their home loan interest. However, applicants have to meet specific criteria to become a beneficiary under this scheme. 

Also, the subsidy on a home loan is computed on the prevailing interest rates. It must be noted that the interest subsidy amount is also based on tenure and is capped at Rs.2.35 lakh. The said amount is subtracted from the principal loan amount, and subsequently, the payable EMI amount is reduced. 

Generally, besides the purchase of property, CLSS is available for the purpose of new construction, extension, and improvement of rooms, toilets, kitchens, etc. of existing dwellings. The government is pushing for affordable housing with the scheme of housing for all by 2022 through CLSS.

Who is Eligible for CLSS?

The Credit Linked Subsidy Scheme eligibility is elucidated in this table below –

Parameters  Economically Backward Section Lower Income Group Middle Income Group -I Middle Income Group – II
Annual household Income  Rs.3 lakh More than Rs.3 lakh and Rs.6 lakh Between Rs.6 lakh  and Rs.12 lakh Between Rs.12 lakh and Rs.18 lakh
Eligible home loan amount  A maximum of Rs.6 lakh A maximum of Rs.6 lakh A maximum of Rs.9 lakh A maximum of Rs.12 lakh
Loan tenure 20 years  20 years  20 years 20 years
Discounted NPV % 9% 9% 9% 9%
Interest subsidy 6.5% 6.5% 4% 3%
Revised carpet area 30 sq.m 60 sq.m 160 sq.m 200 sq.m

 

Other than these, applicants must fulfil the following criteria to become a beneficiary of PMAY CLSS –

  • An adult female family member must co-own the property under question.
  • The applicant must not possess any pucca house in any part of India.
  • The location of the property in question must be within the statutory towns of the census and its adjacent planning area.
  • Applicants should not be a beneficiary of any housing scheme backed by either the Central or state government.

Eligible candidates can save a substantial amount on their loan EMI and make the most of home loans. It must be noted that individuals are required to back their eligibility by furnishing significant documents and meeting additional requirements. 

What are the Documents Required for PMAY CLSS?

Following is a list of documents that are deemed essential for PMAY CLSS

  • PAN (mandatory)
  • Documents that serve as proof of identity like – Aadhaar Card, Voter card, passport, driving license, etc. 
  • Documents that serve as proof of address like – latest utility bills, Aadhaar card, voter card, passport, residence address certificate, rent agreement on stamp paper, etc. 
  • Latest salary slips
  • Bank statement of salaried 
  • Latest ITR/ Form 16
  • Documents related to current loans and repayment bank statements of at least six months.
  • Property documents like – a copy of chain documents, sale agreement, allotment letter, receipt of payment.

Typically, one can avail of a CLSS by getting in touch with a financial institution that comes under the purview of this scheme. Eligible candidates can avail of a loan subsidy application from the financial institution which has to be duly filled and submitted in addition to the documents mentioned above. 

Once the documents are verified, the home loan amount is disbursed to the applicant’s bank account. After these necessary formalities are completed, nodal agencies initiate the process of linking the bank account and subsidy the said applicant is eligible for under this scheme. The concerned nodal agencies are – National Housing Bank (NHB) and Housing and Urban Development Corporation (HUDCO).  

How to Avail PMAY Subsidy Scheme

  • You must first determine whether you are eligible to apply for the Home Loan Credit Linked Subsidy Scheme.
  • If you meet all of the eligibility requirements, you must contact the financial institutions or banks that participate in the PMAY initiative.
  • Fill out the PMAY Home Loan Credit Linked Subsidy Application form and submit it to the lender along with the required papers.
  • The home loan amount will be deposited into your bank account after verification.
  • After the loan is disbursed, your lender will contact the nodal agencies to begin the process of collecting interest subsidies.
  • The interest subsidy will be credited to your loan account upon verification, and your loan amount will be reduced, lowering your Equated Monthly Installment amount.

How to Check the Status of Credit Linked Subsidy Scheme?

One can check the Credit Linked Subsidy Scheme status by following these steps –

Step 1 – Visit the official website of PMAY.

Step 2 – Login with the help of a user ID and password.

Step 3 – Select ‘Track Your Assessment’ available at the bottom of the menu.

Step 4 – Select either of the two options – ‘ID Type or By Assessment ID’ or ‘By Name, Father’s Name’ to check the application status.

Step 5 – If you choose the first option; enter details like – the name of the state, district, and city, applicant’s name, father’s name, and mobile number.

Alternatively, if you choose to track the Credit Linked Subsidy Scheme status with the help of the Assessment ID, provide details like – Assessment ID and registered mobile number.

Step 6 – Press the ‘Submit’ button to complete the process and initiate the tracking process.

Once these steps are complete, the status will appear on the screen. 

FAQs on Credit Linked Subsidy Scheme

Q1. Is the Credit Linked Subsidy available at all banks in the country?

Yes, all banks on the RBI’s list provide the Credit Linked Subsidy.

Q2. Who is eligible to receive an interest subsidy under the Credit Linked Subsidy Scheme?

Subject to income restrictions, a recipient family who does not own a home in any area of India is eligible for this subsidy.

Q3. Can a beneficiary extend the loan duration beyond 20 years?

Yes. If the lender agrees, a beneficiary can specify a loan duration of more than 20 years.

Q4. Is there a cap on the cost of a home to qualify for the Credit Linked Subsidy Scheme?

No. The cost of the property is not limited, but the subsidy will be limited to the loan amount defined against each category, and any more amount will be at a non-subsidized rate of interest.

Q5. Should I provide any more documentation to qualify for this subsidy?

No. It is necessary to have the beneficiary sign a self-declaration form stating that he or she does not own any pucca houses.

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