Credit Linked Subsidy SchemeProving the success of Credit Linked Subsidy Scheme (CLSS), the number of applications which have been received for it by the government by different channels is more than 1.66 crore. We had always faced the issue of being digitalized because our overall internet involvement is just 32%, but that also seems to vanish now, in case of applying for CLSS. Although, going complete digital will need proper assistance. But that will prove to be advantageous as it will provide employment opportunities.

The CLSS was launched by the Housing Ministry with the motive of making finance available to our Prime Minister’s noble vision of providing Housing for All by 2022. The most amazing thing lies in the fact that while, earlier, the topic of computation was the housing shortage, now the number of sanctions for CLSS are being praised.

But the question is that what is the procedure of getting the sanctions availed? Under the Pradhan Mantri Awas Yojana (PMAY), the CLSS was offering an interest subsidy of 6.5%. For an initial amount for Rs.6 lakh availed, the amount of credit subsidy will be credited in the account of borrower. The annual income of the borrower was supposed to under Rs.6 Lakh. This lets the subsidy to go reach 21%. This was the first time that the government had made efforts for even the Lower Income Group of the society, apart from Economically Weaker Sections, which were always focused upon.

Later, two new credit subsidy schemes were announced by the Prime Minister which included benefits for MIG groups. After this the benefits increased for people with an annual income of Rs.12 lakh and Rs.18 lakh to avail the subsidy of up to 4% and 3% respectively.

Therefore, according to the CLSS, if somebody who was earning an annual income of Rs.18 lakh went for a loan to a bank he would be able to get a home loan of around Rs.65 lakh. 3% subsidy would be available to him for the initial Rs.18 lakh, if he applied for the loan after 1st January, 2017. Because of this, the interest rate reduces from the current 8.5%. This becomes the perfect time for investing in affordable housing.

Contrary to the assumption by people of digital problems, more than 30 lakh people have come forward for the application on HUPA website, that too without any support. Some states were not at all encouraging and supporting the applications for CLSS, and therefore Common Service Centers had to launch which was managed by IT professionals. Despite them charging a fee of Rs.25 per application, people have willingly applied. As a next step, NHB (National Housing Bank) is working on analyzing the eligibility of the applications and has estimated that the number of loans given out will be 80 to 90 lakhs.

The Middle Income Group (MIG) has been included in the segment of affordable housing. However, since subsidies for MIG is only valid for one year, the industry should be encouraged to enjoy the benefits of the scheme by transferring to MIG.

One more matter to be seriously taken into account is ensuring the interest of the developer in the upper end of the LIG segment. This is because the developers will easily make money out the MIG segment, which will be difficult to achieve in the upper end of the LIG segment. Therefore, to keep their interest, a portion of priority lending funds received by banks should be kept aside for the development of LIG housing.

Because of the digital cash movements like Digidhan, workers from informal sectors have the access to a digital tracker to give them their CIBIL score. Lenders like SEWA bank are already using this to lend money ranging from Rs.1 lakh to Rs.3 lakh. The ministry is also looking into the matter of lending made to the unorganized segment and sorting it out IBA (Indian Banks Association).

A simple process of application and documentation has to be followed by the informal sector, as per the circulation by IBA. However, banks will have to be a little lenient during the process, as the informal sector will probably not be able to show all the required documents to complement their application.

If you are in a situation where the person who is selling the house to you had got it under the scheme of subsidy but is now selling it because the lock-in period is finished then you will be entitled to receive the funding under the subsidy. However, on the other hand, the seller will not be eligible to get more subsidies.

Initially, as per the Census, PMAY was launched in a total of 4011 statutory towns but now to avail the advantages of the PMAY, more statutory towns are being added by the states. Now the total comes up to be 4300.

The main motive behind PMAY not let anybody be deprived of having a house, which is a very basic necessity of livelihood. The schemes are made in such a way that the purchasing the first house becomes easy and affordable.

Now that the government has finally included MIG and LIG in the sector of affordable housing, it is clearly taking initiatives to fulfill people’s dreams by providing resources.

As of now, the schemes are available only in year of 2017-18. Apart from this, the interest on home loans has also been reduced. If we keep them subsidies and look at the interest rates in the last 20 years, these are the lowest. And hence, 2017 is actually the best time to buy an affordable house.