Explaining Credit Link Subsidy Scheme Under The PMAY

By: | In: Real Estate News | Create Date: 2017-09-27

Explaining Credit Link Subsidy Scheme Under The PMAY


The Indian Government led by Honorable Prime Minister Narendra Modi is working with all its might to transform its vision of ‘Housing For All By 2022’ into a reality. Mr. Modi launched the Pradhan Mantri Awas Yojana on 25 June 2015 with the sole aim to make India a utopian country where every person has a roof over the head irrespective of the financial status. Many schemes, launched by the government, are supporting and gradually taking this mission towards a fruitful completion. From announcing the interest rebate scheme to giving infrastructure status to affordable housing and the much talked about credit linked subsidy, the government is coming up with new tactics to make sure that it is able to realize its dream of ‘Housing For All By 2022’. In this blog post, we are throwing light on CLSS aka Credit Linked Subsidy Scheme under the Pradhan Mantri Awas Yojana.


Explaining Credit Linked Subsidy
The Ministry of Housing and Urban Poverty Alleviation introduced the Credit Linked Subsidy in order to speed up the government’s dream of ‘Housing For All By 2022’. Targeting majorly on the housing needs of the urban poor, the CLSS aims to increase the institutional credit flow in this section. National Housing Bank (NHB) and Housing Urban Development Corp (HUDCO) are the two central nodal agencies that are implementing this scheme.


The homebuyers belonging to the Economically Weaker Section the Lower Income Groups, and the Middle Income Groups and are seeking home loan are eligible to take advantage of the CLSS scheme. This scheme would reduce the interest paid on the home loan by 6.5% and would, therefore, encourage the people belonging to EWS and the LIG sections of the society to buy a home for themselves. The effective housing loan and the EMI (Equated Monthly Instalment) would become comparatively low after the interest subsidy is credited upfront to the beneficiary’s loan account. The subsidy on the interest amount would be calculated at a 9% discount rate. Those belonging to the MIG-I with an annual income between INR 6,00,001 and INR 12,00,000, and MIG-II, with an annual income falling between INR 12,00,001 and INR 18,00,000 would get a subsidy of 4% and 3% respectively.


Eligibility For The Scheme
By now, we know, only the people belonging to the Economically Weaker Section (EWS), Lower Income Group (LIG) and the Middle Income Group (MIG) are eligible to take benefits of this scheme. However, there are other criterions as well that judge the eligibility of a homebuyer for availing the benefits of this scheme. They are:


  • The homebuyer or any member of the homebuyer’s family should not own any type of pucca house in any part of India under his/her name.
  • For the married couples, only one of the spouses can take a single subsidy. The subsidy can also be availed if the two are planning to buy a house as joint ownership.
  • The family of the beneficiary from this scheme should not have availed any type of subsidy or any other central assistance from the government under the Pradhan Mantri Awas Yojana.

A homebuyer fulfilling all these eligibility conditions would be able to take the benefits of this subsidy scheme and get a more affordable loan for buying their affordable houses.


The CLSS or the Credit Link Subsidy Scheme is predicted to have a positive impact on the Indian real estate. With subsidy on the interest rate for various home loans, the Indian real estate is set to see a revival. The PMAY’s Credit Link Subsidy Scheme is deemed as a great initiative by the government to alleviate the housing conditions of the poor, especially the urban poor. The people seeking to buy the affordable homes under the Pradhan Mantri Awas Yojana would be getting affordable loans as well. This initiative is a ray of hope that would certainly encourage the buyers to buy an affordable house as well as the builders to build affordable homes for the masses.

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