A Complete Guide to PMAY CLSS and Its Benefits

Owning a home is not out of reach anymore! Imagine a future where owning a home is not just a dream but an achievable reality for everyone. That’s the vision behind the Pradhan Mantri Awas Yojana (PMAY), a government initiative aimed at providing affordable housing to the urban poor.

A crucial part of this ambitious plan is the PMAY Credit Linked Subsidy Scheme (CLSS), designed to ease the burden of home loans for lower and middle-income families through significant interest subsidies. In this guide, we’ll explore how the PMAY CLSS can help bridge the gap between you and your dream home, detailing the workings of the scheme and the benefits it brings.

What is the Credit Linked Subsidy Scheme (CLSS)?

The Credit Linked Subsidy Scheme (CLSS) is a component of the Pradhan Mantri Awas Yojana (PMAY), specifically designed to make buying a home more affordable for lower and middle-income groups. 

Under CLSS, eligible homebuyers receive a subsidy on the interest rate of their home loans. This subsidy helps reduce the amount of the monthly loan repayment, making it easier for families to afford a home. 

The scheme targets specific income categories and provides varying subsidy rates based on the income bracket of the applicant, thereby promoting home ownership across different socio-economic sections of society.

CLSS Eligibility Criteria

Here’s how the PMAY scheme determines your eligibility for the CLSS scheme based on your household’s annual income:

Income Group	Total Annual Household Income
Economically Weaker Sections (EWS)	Up to Rs. 3 Lakhs
Low Income Group (LIG)	Rs. 3 lakhs – Rs. 6 lakhs
Middle Income Group-I (MIG-I)	Rs. 6 lakhs – Rs. 12 lakhs
Middle Income Group-I (MIG-II)	Rs. 12 lakhs – Rs. 18 lakhs

Additional Eligibility Requirements for the CLSS Scheme

1. The property must be located in one of the statutory towns as per the 2011 census list.
2. For applicants in the EWS and LIG categories, a female member must be a co-owner of the property.
3. Applicants must not have received any government housing subsidies previously.
4. The PMAY CLSS is available only to first-time homebuyers.
5. Neither the applicant nor their immediate family members (spouse and unmarried children) should own a pucca (permanent) house anywhere in India.
6. Applicants from Scheduled Tribes (STs), Scheduled Castes (SCs), and other minority groups are eligible.
7. Applicants owning a one or two-room house with kutcha (non-permanent) walls or roof may apply for benefits.
8. Those holding a Kisan Credit Card must have a credit limit of no more than Rs. 50,000.
9. Applicants must not own any motor vehicles, including two-wheelers, three-wheelers, or four-wheelers.
10. The household should not possess a refrigerator or a landline phone.
11. Only those who have taken home loans after the scheme’s implementation in 2017 are eligible for these benefits.

How Does PMAY CLSS Work?

For a clearer insight into how the PMAY CLSS operates, here is a detailed example:

Family Profile:

• Annual Income: Rs. 5 lakhs
• Category: Lower Income Group (LIG)
• Loan Amount: Rs. 6 lakh
• Original Home Loan Interest Rate: 10%

PMAY CLSS Benefit Calculation:

1. Determine Eligibility:
   • Since the family’s annual income is Rs. 5 lakhs, they fall under the LIG category.
2. Calculate the Interest Subsidy:
   • Eligible Subsidy Rate: 6.5% for LIG category.
   • Effective Interest Rate After Subsidy: 10% – 6.5% = 3.5%.
3. Subsidy Impact on Loan:
   • The subsidy is calculated on a maximum principal of Rs. 6 lakh.
   • Subsidy Calculation Formula: Interest subsidy of 6.5% applied on Rs. 6 lakh for the maximum tenure of 20 years. This would effectively reduce the principal amount due to the upfront credit of the subsidy.
4. Estimate Monthly EMI Without Subsidy:
   • Formula: EMI = [P x r x (1+r)^n] / [(1+r)^n – 1]
   • Here: P is the principal amount, r is the monthly interest rate, and n is the number of monthly instalments.
   • Calculation: EMI for Rs. 6 lakh at 10% interest over 20 years (240 months).
5. Estimate Monthly EMI With Subsidy:
   • The subsidy amount is credited upfront, reducing the principal on which future EMIs are calculated. Hence, the monthly EMI is recalculated on the reduced principal at the new effective interest rate of 3.5%.

The Outcome

The family benefits from lower monthly EMIs due to the upfront subsidy under the PMAY CLSS, making the home loan more affordable and home ownership more attainable within their financial constraints.

This detailed breakdown shows the direct financial impact of the PMAY CLSS on a typical beneficiary in the LIG category, highlighting the scheme’s role in facilitating more accessible home ownership for economically weaker sections.

How to Apply for the PMAY CLSS Scheme?

To apply for the PMAY CLSS (Credit Linked Subsidy Scheme), follow these steps:

1. Check Eligibility:
   • Ensure you meet the income criteria for your category (EWS, LIG, MIG-I, MIG-II).
   • Verify that neither you nor your family members own a pucca house in India.
   • Ensure you haven’t received benefits from any other central housing schemes.
2. Prepare Documents:
   • Keep your Aadhaar number handy.
   • Gather necessary documents like ID proof (Voter ID, Aadhaar, etc.), address proof (utility bill, rent agreement), and income proof (salary slips, ITR).
3. Apply Online:
   • Visit the PMAY MIS portal: pmaymis.gov.in.
   • Click on ‘Citizen Assessment’ and select the appropriate category.
   • Fill out the application form with the required details and submit.
4. Apply Offline:
   • Obtain the application form from a Common Service Center (CSC).
   • Fill out the form and submit it with a nominal fee.
5. Submit to Lending Institution:
   • If applying for CLSS, submit your application to a bank or housing finance company that supports the scheme. More than 70 institutions, including major banks like SBI, HDFC, and ICICI, participate in the program.
6. Loan Approval and Subsidy Claim:
   • Once your loan is approved, the lending institution will claim the subsidy on your behalf.
   • The subsidy amount will be credited to your loan account, reducing your principal loan amount.
7. Track Your Application:
   • Use the CLSS Awas Portal (CLAP) to track the status of your application: pmayuclap.gov.in.
8. Helpline for Assistance:
   • For any queries, you can contact the NHB toll-free numbers: 1800-11-3377, 1800-11-3388 or HUDCO: 1800-11-6163.

Conclusion

Securing a home is now within your reach, thanks to the PMAY CLSS scheme. With its substantial interest subsidies, the scheme lightens your financial load and makes home ownership achievable for lower and middle-income families. 

If you’re ready to take the next step towards affordable home ownership, the experienced professionals at Credit Dharma can help guide you through the process. Visit Credit Dharma today to explore your options, get expert advice, and start your journey towards securing your dream home under the PMAY CLSS scheme. 

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