Smart things to Know about CLSS Scheme

Pradhan Mantri Awas Yojna- Housing for All. With a Focus on Urban as well as Rural area, two version of PMAY has been launched i.e. Urban and Rural.

9 Mar,2017 04:15 IST 1338
Smart things to Know about CLSS Scheme

The basic need of every human being is Food, Clothing, and Shelter. To fulfill one of the needs, the shelter, Government of India had announced Pradhan Mantri Awas Yojna – Housing for All. With a Focus on Urban as well as Rural area, two version of PMAY has been launched i.e. Urban and Rural.

The Urban version has been named as PMAY – Housing for All (Urban). It came into force w.e.f June 17, 2015, and aims at addressing the shortage of 20 million slum and non-slum urban poor households, by 2022. Under the PMAY (Urban), central assistance are being provided to the Urban Local Bodies (ULB) and other implementing agencies through union territories (UT) and States for the following –

  • In-situ rehabilitation of existing slum dwellers using land as a resource through private participation 
  • Credit linked subsidy scheme (CLSS)
  • Affordable housing in partnership
  • Subsidy for survey-led individual house construction or enhancement

The Mission, in order to expand institutional credit flow to the housing needs of urban poor, implemented CLSS component as a demand side intervention. CLSS benefit is provided on home loans taken by the eligible urban poor (EWS/LIG) for acquisition, construction of the house.

  1. To get the benefit of CLSS, eligibility criteria are:
  2. Annual Household/Beneficiary Family* Income shall not exceed Rs. 6 Lakhs.
  3. Female shall be owner/joint-owner# in the property.
  4. Household/Beneficiary family* shall not own a pucca house anywhere in India
  5. Property (to be purchased/constructed) shall fall within 4041 statutory towns and adjacent planning area.
  • Household/Beneficiary shall mean and include husband, wife and un-married children

#    Female ownership is not required where there is no adult female member in the household/beneficiary family.

Beneficiaries of Economically Weaker Section (EWS) and Low Income Group (LIG) seeking housing loans from Banks, Housing Finance Companies, and other such institutions are eligible for an interest subsidy at the rate of 6.5 % for the tenure of 15 years or during the tenure of loan whichever is lower. The Net Present Value (NPV) of the interest subsidy is calculated at a discount rate of 9%. Total maximum amount of subsidy is  up to Rs. 2.20 lakh for eligible beneficiaries meeting all the parameters.

The subsidy is available only for loan amounts upto Rs 6 lakhs and additional loans beyond Rs. 6 lakhs, if any, is at normal interest rate without any subsidy. Interest subsidy as received from Central Nodal Agency is credited upfront to the loan account of beneficiaries through lending institutions which result in a reduction in outstanding loan amount as well as EMI.

Credit linked subsidy is available for housing loans availed for new construction and addition of rooms, kitchen, toilet etc. to existing dwellings as incremental housing. The carpet area of houses being constructed under this component of the mission should be  up to 30 square meters and 60 square for EWS and LIG, respectively in order to avail of this subsidy. The beneficiary, at his/her discretion, can build a house of larger area but interest subvention would be limited to first Rs. 6 lakh only.

This Scheme is being implemented through two Central Nodal Agencies – National Housing Bank (NHB) and Housing Urban Development Corp (HUDCO). Till date, the Scheme has drawn a lot of traction from the housing finance industry with 201 primary lending institutions registered under the scheme, 71 represented by housing finance companies (HFCs). 

IIFL Home Finance Limited has been able to pass on this benefit to more than 1800 families and this number is increasing.

Further, The Prime Minister of India in his address to the nation on the new year’s eve, has announced the extension of the scheme to cover loans up to Rs 9 lakh and up to Rs 12 lakh, with interest subsidy of 4% and 3%, respectively for home loans availed under this scheme. The new schemes have been aimed to cover the MIG category of household covering the benefit of CLSS for a middle-income category of customer i.e. income upto up to Rs. 18 lakh. However, these new schemes are yet to be notified /announced by Government of India and final detail of schemes will give more clarity on various other procedural /eligibility aspects.

 

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

Most Read

Check the Difference Between 24k and 22k Gold
18 Jun,2024 09:26 IST
67241 Views
Like 8253 8253 Likes
Franking and Stamping: What’s the difference?
14 Aug,2017 03:45 IST
47764 Views
Like 9588 9588 Likes
Why Gold Is Cheaper In Kerala?
15 Feb,2024 09:35 IST
1859 Views
Like 6154 1802 Likes
Personal Loan With Low CIBIL Score
21 Jun,2022 09:38 IST
31149 Views
Like 8575 8575 Likes

Get in Touch

By clicking on Apply Now button on the page, you authorize IIFL & its representatives to inform you about various products, offers and services provided by IIFL through any mode including telephone calls, SMS, letters, whatsapp etc.You confirm that laws in relation to unsolicited communication referred in 'National Do Not Call Registry' as laid down by 'Telecom Regulatory Authority of India' will not be applicable for such information/communication.
I accept the Terms and Conditions