Interest subsidy scheme for housing gives preference to women: 10 points to know

The Centre's credit-linked interest subsidy scheme for housing loans taken by people in mid-income groups has been made effective from 1 January under which EMIs will go down by over Rs 2,000 per month.

Prime Minister Narendra Modi had on 31 December 2016 announced the Credit Linked Subsidy Scheme for Middle Income Groups -- CLSS(MIG).

The operational guidelines of the scheme, which is part of the housing for all by 2022 project, was released on Wednesday by Minister of Housing and Urban Poverty Alleviation M Venkaiah Naidu.

Here are the details of the scheme:

1) Under the scheme, home buyers get interest subsidy. Those with an income of up to Rs 12 lakh per year can avail of 4 percent subvention on housing loans of up to Rs 9 lakh and those with having an income of Rs 12-18 lakh per year can get 3 percent on housing loans of up to Rs 12 lakh.

2) The interest subsidy of 4 percent under the scheme will bring down EMI by Rs 2,062 per month on a housing loan of Rs 9 lakh and interest subsidy of 3 percent will reduce the monthly outgo by Rs 2,019 on Rs 12 lakh loan, considering normal housing loan interest rate of 8.65 percent.

Representational image. Reuters

Representational image. Reuters

3) With the scheme coming into effect from 1 January, those who were sanctioned home loans and whose applications are under consideration since beginning of the year will be eligible for interest subsidy of up to Rs 2.35 lakh.

4) Middle income groups with annual incomes above Rs 6 lakhs and up to Rs 18 lakhs per year are eligible for interest subsidy on housing loans under the new CLSS(MIG).

5) The total interest subsidy accruing on the loan amounts will be paid to the beneficiaries upfront in one go. The total interest subsidy to be paid to MIG people on Rs 9 lakh loan comes to Rs 2.35 lakh and on a loan of Rs 12 lakh, it comes to Rs 2.30 lakh per beneficiary.

6) A beneficiary family has been defined as comprising of wife, husband and unmarried daughters and sons. Others, including unmarried and earning young adults are eligible for the scheme. It can be used for either acquisition or construction of a new house or repurchase.

7) Those earning up to Rs 12 lakh can avail of the scheme for constructing/ acquiring a house with carpet area of 90 sq metres (nearly 970 sq ft). For those earning Rs 12-18 lakh, the house size is 110 sq metres (nearly 1200 sq feet).

8) As many as 70 lending institutions, including 45 Housing Finance Companies and 15 scheduled banks, have signed Memoranda of Understanding with National Housing Bank (NHB) for implementation of CLSS (MIG).

9) The scheme has a preference for women with "overriding preference to widows, single working women, persons belonging to scheduled castes and scheduled tribes, backward classes, differently abled and transgender people".

10) The scheme will remain open for one year initially. No processing fee will be charged from the applicants under the scheme.

With PTI inputs

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Updated Date: Mar 23, 2017 13:27:00 IST

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