Middleclass Homebuyers To Benefit From Subsidy On Housing Loans Under PMAY

Talking clearly about the government’s Credit Linked Subsidy Scheme (CLSS) for middleclass homebuyers, Union Minister, Venkaiah Naidu has finally released the guidelines to that the scheme can be executed.

The move of government in the form of Credit Linked Subsidy Scheme will hopefully decrease the Equated Monthly Installments (EMI) by around Rs.2000 for middleclass homebuyers.

Under Pradhan Mantri Aawas Yojana (PMAY), all middleclass homebuyers who have an annual income in the range of Rs.6 lakhs to Rs.18 lakh will be eligible to get interest subsidy on loans under PMAY.

Interest subsidy on home loans under PMAY for middleclass homebuyers to construct or purchase homes will be provided under the following basis –

• 90 square meters of carpet area for those having an annual income up to Rs.12 lakh 
• 110 square meters of carpet area for those having an annual income up to Rs.18 lakh

Middleclass homebuyers will also be exempted from paying any kind processing fees to Housing Finance Companies (HFCs) or banks.

The best part is that our Prime Minister is not only concentrating on low-income group of the society, but also has an equal focus on middleclass group. The reason being that they are a very significant part of our economy and their dream of having an own house, which is a very basic need, must be supported.

Prime minister had recently announced the extended scope of CLSSA to middleclass homebuyers also. Interest subsidy on housing loans of up to Rs.9 lakh will be 4% for those with an income of Rs.12 lakh per annum. Similarly, subsidy on housing loans of up to Rs.12 lakh will be 3% for those with an income of Rs.18 lakh per annum.

The scheme of providing interest subsidy loans will be applicable for just one year, that is, 2017. Rs.1000 crore has been assigned in the union budget for this scheme.
There are chances of this scheme getting extended for middleclass homebuyers, which would depend on response and performance.

The tenure chosen by the homebuyer or the maximum of 20 years provided by the government, whichever is lower, will be applicable.

This government’s Credit Linked Subsidy Scheme will give priority to women and that too more preference being given to single working women, widows and people from SCs and STs.
A Memorandum of Understanding (MoU) has been signed by National Housing Bank (NHB) with the following, for the execution of this scheme of subsidy on housing loans –

• 15 banks
• 45 HFCs
• 2 regional rural banks
• 4 small finance banks 3 non-banking finance companies
• 1 cooperative bank