Credit Linked Subsidy Scheme (CLSS)


  • CLSS scheme extended till March 2020 - New Year's Gift to first time home buyers.

In the recently concluded Press Conference, Nirmala Sitharaman announced the extension in the last date of Pradhan Mantri Awas Yojana (PMAY) Credit-Linked Subsidy Scheme (CLSS) for the individuals both in category MIG-I and MIG-II.

Before today, the last date for anyone who wants to enjoy the benefits of PMAY CLSS scheme was March 31, 2020. After the extension, you can avail the benefits till March 31, 2021. However, the date will be March 31, 2022 for the LIG/EWS category.

The main objective behind this extension is to make sure that people coming from the lower strata of the middle class families can be benefited more. According to the estimation, more than 2.5 lakh families from the middle class background will be able to enjoy the benefits from this extension of the date. The annual income must be between INR 6 lakh to INR 18 lakh.

New Year Cheers for Home Buyers

The government on Monday extended the interest subsidy scheme till March 31, 2020 for first time urban homebuyers who have annual income between ₹6 lakh and ₹18 lakh. The eligible candidates will enjoy interest subsidy up to ₹2.67 lakhs on their first home bought via home loan for one more year. This is surely a good news to all those who have been planning to buy their first home in the year 2019-2020.

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 since January 1, 2017. CLSS schemes 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.

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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 now available till March 2020. 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.

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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 2020.

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.

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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. CLSS subsidy is surely a saving for a home loan borrower as it saved up to ₹2.67 lakhs on your home loan. You calculate the difference between the EMIs with and without interest subsidy with a CLSS home loan interest saving calculator. It helps you identify how much amount you save each month by availing the scheme.

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.

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