Pradhan Mantri Awas Yojana

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Credit Linked Subsidy Scheme

The Mission, in order to expand institutional credit flow to the housing needs of urban poor will implement credit linked subsidy component as a demand side intervention. Credit linked subsidy will be provided on home loans taken by eligible urban poor (EWS / LIG) for acquisition, construction of house.

  • Beneficiaries of Economically Weaker section (EWS) and Low Income Group (LIG) seeking housing loans from Banks, Housing Finance Companies and other such institutions would be eligible for an interest subsidy at the rate of 6.5 % for a tenure of 15 years or during tenure of loan whichever is lower. The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9%.
  • The credit linked subsidy will be available only for loan amounts upto Rs 6 lakhs and additional loans beyond Rs. 6 lakhs, if any, will be at non-subsidized rate. Interest subsidy will be credited upfront to the loan account of beneficiaries through lending institutions resulting in reduced effective housing loan and Equated Monthly Installment (EMI).
  • Credit linked subsidy would be available for housing loans availed for new construction and addition of rooms, kitchen, toilet etc. to existing dwellings as incremental housing. The carpet area of houses being constructed or enhanced under this component of the mission should be upto 30 square metres and 60 square metres for EWS and LIG, respectively in order to avail of this credit linked subsidy. The beneficiary, at his/her discretion, can build a house of larger area but interest subvention would be limited to first Rs. 6 lakh only.
  • Housing and Urban Development Corporation (HUDCO) and National Housing Bank (NHB) have been identified as Central Nodal Agencies (CNAs) to channelize this subsidy to the lending institutions and for monitoring the progress of this component. Ministry may notify other institutions as CNA in future.
  • Primary Lending Institutions (PLIs) can register only with one CNA by signing MOU as provided in Annexure 1.
  • CNAs will be responsible for ensuring proper implementation and monitoring of the scheme and will put in place appropriate mechanisms for the purpose. CNAs will provide periodic monitoring inputs to the Ministry of Housing and Urban Poverty Alleviation through regular monthly and quarterly reports as per Annexure 2.
  • State /UTs / ULBs / PLIs shall link beneficiary identification to Aadhaar, Voter card, any other unique identification or a certificate of house ownership from Revenue Authority of Beneficiary’s native district to avoid duplication.
  • Preference under the Scheme, subject to beneficiaries being from EWS / LIG segments, should be given to Manual Scavengers, Women (with overriding preference to widows), persons belonging to Scheduled Castes / Scheduled Tribes/Other Backward Classes, Minorities, Persons with disabilities and Transgender.
  • State Level Nodal Agency (SLNA) identified by State / UT for implementing the mission will facilitate the identified eligible beneficiaries in getting approvals and documents, etc. to avail of credit linked subsidy.
  • For identification as an EWS or LIG beneficiary under the scheme, an individual loan applicant will submit self-certificate/affidavit as proof of income.
  • In case a borrower who has taken a housing loan and availed of interest subvention under the scheme but later on switches to another PLI for balance transfer, such beneficiary will not be eligible to claim the benefit of interest subvention again.
  • Under the Mission, beneficiaries can take advantage under one component only. Since other three components are to be implemented by State Government through Urban Local Bodies/ Authorities etc. and this component is to be implemented by PLIs, therefore, in order that beneficiaries do not take advantage of more than one component, PLIs should take NOCs quarterly from State / UT Governments or designated agency of State / UT Governments for the list of beneficiaries being given benefits under credit linked subsidy. For enabling this process, the beneficiaries should be linked to his/her Aadhaar / Voter ID Card/Any other unique identification Number or a certificate of house ownership from Revenue Authority of Beneficiary’s native district and State / UT Government or its designated agency should furnish the NOC within 15 days of receipt of such request.

Till 30.06.2016, however, or until States/UTs sign MoA under the Mission, whichever is later, instead of taking NOC from States / UTs, CNAs, on behalf of PLIs, would send list of beneficiaries under CLSS on fortnightly basis to concerned States / UTs. Concerned States / UTs will consider this list, while deciding beneficiaries under other three verticals of the Mission, so that no beneficiary is granted more than one benefit under the Mission.