CLSS EWS/LIG and MIG Schemes under PMAY

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    CLSS comes under the Pradhan Mantri Awas Yojana (PMAY)- Housing for All (Urban) by 2022 scheme and is for the beneficiaries of Economically Weaker Section (EWS), Low Income Group (LIG) and Middle Income Group (MIG). On November 17, 2017, the government has increased the carpet size for the MIG-I and MIG-II from 90 square meters to 120 square meters and 110 square meters to 150 square meters respectively.

    The scheme has been released by Minister of Housing and Urban Poverty Alleviation Shri M.Venkaiah Naidu recently and is effective from January 1, 2017. Prime Minister has announced interest subsidy of 4% on housing loans of up to ₹9 lakhs of those with an income of ₹12 lakh per year and of 3% on housing loans of up to ₹12 lakhs of those earning ₹18 lakhs per year under the CLSS-MIG scheme. Middle Income Groups (MIG) with annual incomes of above ₹6 lakhs and up to ₹18 lakhs per year are eligible for interest subsidy on housing loans under the new CLSS (MIG) which can be availed till March 2019. As per CLSS (EWS/LIG), the beneficiaries of Economically Weaker Section (EWS) and Low Income Group (LIG) seeking home loans or housing loans from Banks, Housing Finance Companies (NBFCs) and other such institutions would be eligible for an interest subsidy at the rate of 6.50% interest subsidy on a loan of up to ₹6 lakh and additional loans beyond ₹6 lakhs (if any) will be at non-subsidized rate.

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    Minister of State for HUPA Rao Inderjit Singh said Housing for All Mission is the most important initiatives of the Government to ensure a decent house for all by 2022. Since the middle-income groups are better equipped to take advantage of the interest subsidy scheme in quick time and to enable meeting the Housing for All target by 2022, implementation of CLSS (MIG) is initially envisaged for one year.

    Speaking on the occasion, Shri Naidu said that Middle-Income Groups make a substantial contribution to the economic growth of the country besides paying taxes and deserved support to fulfill the dream of owning a house which is a basic and genuine aspiration. He further said that large-scale incentivization of affordable housing will boost real estate sector resulting in employment generation as well. He urged the banks and other lending institution to adopt a pro­active approach to reach the benefits to MIG people.

    Shri Sriram Kalyanaraman, MD, and CEO of National Housing Bank said that during 2015-­16, against total new bookings of ₹28.90 lakh units with loans of up to ₹10 lakhs each, Public Sector Banks and Housing Finance Banks advanced loans of ₹9.50 lakh crore and accounted for 64% of total bookings.


    In the Guidelines for CLSS (MIG), the tenure of loan has been stipulated to be 20 years or that preferred by the beneficiary, whichever is lower. The total interest subsidy accruing on these loan amounts will be paid to the beneficiaries up front in one go there by reducing the burden of Equated Monthly Instalment (EMI). Under this scheme, the customers can get the interest subsidy of up to 4% for the 20 years home loan. The scheme was valid till December 2017 only but now the customers can avail the benefit for 15 months more. Now, the interest subsidy is available till March 2019.

    While defining the beneficiary family as comprising of wife, husband and unmarried daughters and sons, the Guidelines, in an acknowledgement of the aspirations of the youth, have made even unmarried and earning young adults eligible for taking the benefit of interest subsidy under CLSS (MIG), for acquisition/construction of a new house including repurchase. Interest subsidy will be provided on loans for construction/acquisition of house with the carpet area of 120 sq. meters from the existing size of 90 sq.meters by those earning ₹12 lakh per annum. Also, the carpet size for the income group earning ₹18 lakh per year has been changed from 110 to 150 sq. meters. The changes are effective from January 1, 2017.

    In addition to this, there are add-on benefits for women with overriding preference to widows, single working women, persons belonging to Scheduled Castes and Scheduled Tribes, Backward Classes, Differently abled and Transgender people. Let us have an overview of the key features of this scheme:

    Updated Key Features of CLSS MIG Scheme


    While the new CLSS (MIG) covers people with income of up to ₹12 lakh and ₹18 lakh per year, the CLSS component of PMAY (Urban) launched in June, 2015 and applicable to Economically Weaker Sections (EWS) and Low Income Group (LIG) covers urban poor with income levels of ₹3 lakh and ₹6 lakhs per year respectively. Under CLSS(EWS/LIG), interest subsidy of 6.50% is being provided on a loan of up to ₹6 lakhs. Tenure of this loan is now increased to 20 years from the earlier 15 years, to enable easy repayments. The carpet area of houses constructed should be up to 30 square metres and 60 metres for EWS and LIG, respectively in order to avail this credit linked subsidy facility. The beneficiary can build a house of larger area but the interest allotment would be limited and applicable to first ₹6 lakhs only. Let us have an overview of the key features of this scheme:

    Key Features of CLSS EWS/LIG Scheme

    Annual household income limit₹3,00,000/-Between ₹3,00,001/- to ₹6,00,000/-
    House size or the maximum carpet area30 square meter60 square meter
    Interest subsidy 6.50%
    Loan limit for interest subsidy₹6,00,000/-
    Period of subsidy20 years or loan tenure whichever is less20 years or loan tenure whichever is less
    Maximum amount of subsidy

    Who will facilitate CLSS MIG and CLSS LIG/EWS?

    Small Finance Banks and Non-Banking Finance Company­ Micro Finance Institutions also have been recognized to function as Primary Lending Institutions to widen the scope of implementation of CLSS (MIG) in addition to Scheduled Commercial Banks, Housing Finance Companies, Regional Rural Banks, State and Urban Cooperative Banks for accepting applications directly from beneficiaries and advancing loans under the scheme. NHB and Housing and Urban Development Corporation(HUDCO) have been designated as Central Nodal Agencies (CAN) for implementation of CLSS for both MIG and EWS/LIG who would reimburse interest subsidy to Primary Lending Institutions (PLIs) based on the loans advanced to beneficiaries by PLIs. PLIs include Scheduled Commercial Banks, Housing Finance Companies, Small Housing Banks, State and Urban Cooperative Banks, Regional Rural Banks and NBFCMFI.

    How to apply

    The beneficiaries eligible for interest subsidy under CLSS MIG or CLSS LIG/EWS can directly apply to PLIs and PLIs after due verification of applications will sanction loans and thereafter claim the subsidy from CNAs. You can get this benefit till March 2019.

    Processing Fees

    No processing fee will be charged by PLIs from the applicants under CLSS. So, you can focus on the EMIs and enjoy this benefit.

    How much will you save under CLSS?

    CLSS will surely give you the chance to pay less on your home loan be it under CLSS MIG scheme or CLSS LIG/EWS scheme. The interest subsidy under each scheme is different and hence the savings will also differ. So, let us take an example to see how much will you save if you take a home loan for the loan amount up to ₹35 lakhs for the tenure of 20 years at 8.35% per annum under CLSS LIG/EWS scheme and CLSS MIG (income class up to ₹18 lakhs).

    CLSS SchemeInterest rate on the loan amount eligible for interest subsidy (p.a) Interest rate on remaining loan amount
    Total Interest Outgo without CLSS (A)
    Total Interest Outgo with CLSS (B)Savings (A-B)
    MIG5.35% on ₹12 lakhs8.35% on ₹23 lakhs₹37,10,165₹31,94,904₹5,15,261
    LIG/EWS1.85% on ₹6 lakhs8.35% on ₹29 lakhs₹37,10,165₹31,92,424₹5,17,741

    Source: Press Information Bureau (PIB)

    Personal Loan Interest Rates January 2018
    Bajaj Finserv 10.99% - 16.00%
    Fullerton India 14.00% - 33.00%
    HDFC Bank 10.99% - 20.70%
    ICICI Bank 10.99% - 18.40%
    IndusInd Bank 12.99% - 20.00%
    Kotak Bank 10.99% - 17.99%
    RBL 14.00% - 18.00%
    Standard Chartered Bank 10.99% - 14.49%
    Tata Capital 11.49% - 18.00%
    Home Loan Interest Rates January 2018
    State Bank of India/SBI 8.30% - 8.60%
    HDFC 8.35% - 8.95%
    Bank of Baroda 8.30% - 9.30%
    LIC Housing 8.35% - 8.70%
    PNB Housing Finance 8.35% - 8.70%
    ICICI Bank 8.35% - 8.85%
    Axis Bank 8.35% - 8.75%
    Citibank 8.60% - 9.35%
    Indiabulls Housing Finance Limited 8.35% - 8.55%
    Kotak Bank 8.35%
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