Credit Linked Subsidy Scheme

PMAY CLSS8448 views

In order to help you buy your dream home, the interest subsidy scheme named Credit Linked Subsidy Scheme has been introduced by the government of India which is effective from January 1, 2017. 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). The government has recently increased the home size for middle income group (MIG) under the credit linked subsidy scheme (CLSS). Post the changes, it is expected that the builders can clear their unsold stock and also the demand in the real estate sector would increase.

Apply for Home Loan under CLSS

Under this CLSS-MIG scheme, the customers can get the interest subsidy of up to 4% for the 20 years home loan. The scheme is now available for the customers for 15 months more. The interest subsidy is available till March 2019. A beneficiary receiving the subsidy of ₹2.67 Lakh on a loan amount of ₹20 Lakh for 20 years loan tenure, at an interest rate of 8.30% actually gets loan at an effective home loan rate of 4.30%.

The interest subsidy will be credited upfront to the loan account of beneficiaries through Primary Lending Institutions resulting in reduced effective housing loans and hence the home loan EMI. The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9%.

Pradhan Mantri Awas Yojana (PMAY) for Urban area is more beneficial for first time home borrowers in Tier-2 and Tier-3 cities. Since these cities covered under Tier-2 and Tier-3 have affordable homes as compared to the Tier-1 cities, the credit linked subsidy component is being implemented as a Central Sector Scheme.


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 upto ₹6 lakh and additional loans beyond ₹6 lakhs (if any) will be at non-subsidized rate. The loan tenure has been extended to 20 years which was earlier 15 years making it a little more customer-friendly. The credit linked subsidy would be available for housing loans availed for new construction and an addition of rooms, kitchen, toilet, etc. to the existing dwellings as incremental housing only. 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.


CLSS-MIG scheme is for the Middle Income Groups (MIG) who are buying their first home under Pradhan Mantri Awas Yojana (PMAY) which covers two income segments between ₹6,00,001 to ₹12,00,000 (MIG-I) and ₹12,00,001 to ₹18,00,000 (MIG-II) in a year. As per the scheme, an interest subsidy of 4% has been provided for the loan amount up to ₹9 lakhs for MIG-I segment whereas, for MIG-II, an interest subsidy of 3% has been provided for the loan amount up to ₹12 lakhs. The scheme is now available for the customers for 15 months more that is till March 2019.

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The loan amount exceeding this limit will be charged at the normal interest rate. The interest subsidy will be calculated at 9% NPV over a maximum tenure of 20 years or the actual tenure whichever is lesser. CLSS for MIG -I will support the construction or acquisition of house or re-purchase of the house of the carpet area of 160 square meters. For MIG-II the carpet area of 200 square meters. It is also important to note that the changes are effective from January 1, 2017.

Benefits for Women, Youth, and Weaker Section

The scheme covers the unmarried as well as the youth who can avail the interest subsidy benefit. As per the guidelines, women including widows, single working women, Scheduled Castes (SC), Scheduled Tribes (ST), other minority class, transgender and differently abled people are to be given the preference for the interest subsidy.

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 Online for Home Loans?

Beneficiaries can apply directly to Primary Lending Institutions (PLIs) to avail the interest subsidy. PLIs, after verifying the application, would sanction the loan. Subsequently, you can claim the subsidy from Central Nodal Agencies (CNAs). You can apply online at Wishfin for affordable home loans where the experts help you in saving time and get instant approval facility.

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Processing Fee

There is no processing fee to be charged by PLIs from the applicants under CLSS which is an add-on benefit for the borrowers under this scheme.

CLSS Toll-free Helpline Number

For any query related to CLSS, you can contact National Housing Bank (NHB) on the toll-free number: 1800-11-3377 and 1800-11-3388.

Personal Loan Interest Rates December 2018
Bajaj Finserv10.99% - 16.00%
Fullerton India14.00% - 33.00%
HDFC Bank11.25% - 21.50%
ICICI Bank10.99% - 18.40%
IndusInd Bank10.99% - 16.00%
Kotak Bank10.99% - 20.99%
RBL13.00% - 18.00%
Standard Chartered Bank12.00% - 17.00%
Tata Capital10.99% - 18.00%
Home Loan Interest Rates December 2018
State Bank of India/SBI8.70% - 9.25%
HDFC8.80% - 9.70%
Bank of Baroda8.65% - 9.65%
LIC Housing8.85% - 9.05%
PNB Housing Finance9.00% - 13.00%
ICICI Bank9.00% - 9.25%
Axis Bank8.80% - 9.05%
Citibank9.00% - 9.85%
Indiabulls Housing Finance Limited8.80% - 11.05%
Kotak Bank8.90% - 8.75%
DHFL9.05% - 9.95%
Reliance Home Finance8.75% - 14.00%