Know Everything About Home Loan Subsidy

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Today, all loan home applicants can benefit from the interest subsidy under the PMAY CLSS provided they meet the scheme’s requirements. Read on to know about home loan subsidy.

The Central Government of India introduced the flagship affordable housing scheme, the Pradhan Mantri Awas Yojana in 2015 to provide housing for all my 2022. The scheme has four main components, including:

In-situ slum redevelopment
Affordable housing in partnership
Beneficiary let construction
CLSS (Credit Linked Subsidy Scheme)

Let us know more about CLSS

Under the CLSS, the government has collaborated with several financial institutions, including banks and non-banking financial companies to extend financial assistance to home applicants under PMAY. The support is in the form of interest subsidy to eligible beneficiaries from the lower-income group, economically weaker section and middle-income group. The interest subsidy you receive depends on the income group you belong to. Also, the government has set specific requirements for each income category to qualify for the subsidy benefits.

The Eligibility Criteria to avail PMAY interest subsidy benefits

For all applicants belonging to the EWS and LIG category, a female member of the family must be compulsorily included as the co-owner of the property, irrespective of whether they contribute towards loan repayment.
You or any other member in your family should not have a pucca house anywhere in India. The property that you wish to purchase under PMAY should be the first house.
You or any other member in your family should not have availed financial assistance under any central or state government scheme.
If you are a married person, you can either individually or jointly with your spouse, qualify for a single subsidy.
You can avail the subsidy benefit for purchasing a new home, construction of a home, home extension and renovation. But, this facility is available only for EWS and LIG applicants.
If you belong to the EWS or LIG category, your annual household income should range between Rs. 3 lakhs and Rs. 6 lakhs.
If you belong to MIG I category, your yearly income should not be more than Rs. 12 lakhs, and for MIG II category, the annual income should not be more than Rs. 18 lakhs.

No matter what income group you belong to, as per the PMAY rules, the maximum loan term is 20 years. So, when you apply for a housing loan online, make sure that you understand the eligibility requirements of PMAY first to avoid rejection.

Benefits of PMAY CLSS scheme

Under the PMAY CLSS scheme, you get a subsidy of 2.67 lakhs from the government which is paid upfront to your loan account. This reduces the outstanding loan amount, thus decreasing the EMIs.
As the EMIs are affordable, repaying the loan becomes more manageable, and you need not compromise on your other financial goals.
If you avail this subsidy benefits, you can also claim tax benefits on the home loan. As per the Income Tax Act, 1961, you can claim an exemption up to Rs. 2 lakhs on the interest component under Section 24 and Rs. 1.5 lakhs on the repayment of principal amount under Section 80C.

Steps to Apply for the subsidy?

To avail the subsidy benefit, you can directly approach any lender of your choice that has partnered with the central nodal agencies (HUDCO and NHB) to offer subsidy on home loan to eligible beneficiaries, and follow the below steps.
Request the lender to provide you with the subsidy application form and fill it with accurate details as required
Submit the form along with the home loan application form and the relevant KYC documents for verification
After the lender verifies the papers, the sanctioned amount will be credited to your bank account
Next, the lender will then approach the nodal agencies to process your subsidy application and once approved the lender will receive the subsidy funds
The lender will then credit the funds in your loan account and adjust the EMI accordingly

Thus, a PMAY CLSS subsidy is the most definitive way to get a home loan at a cheaper rate and accomplish your dream of becoming a homeowner.