Credit Linked Subsidy Scheme

Credit Linked Subsidy Scheme

Pradhan Mantri Awas Yojana (Urban) - Housing For All Mission, in order to expand institutional  credit flow to the housing needs of urban poor is implementing credit linked subsidy component as a demand side intervention.

• 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 20* years or during tenure of loan whichever is lower.

• 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 nonsubsidized rate.

• Interest subsidy will be credited upfront to the loan account of beneficiaries through Primary Lending Institutions (PLI), resulting in reduced effective housing loan and Equated Monthly Installment (EMI).

• The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9 %.

Home Ownership
The houses constructed/acquired with central assistance under the Mission should be in the name of the female head of the household or in the joint name of the male head of the household and his wife, and only in case when there is no adult female member in the family, the house can be in the name of male member of the household.

Key highlights of the scheme:
All the Statutory towns as per Census 2011 and towns notified subsequently including Notified Planning/Development Areas and the areas falling within notified Planning/Development area under the jurisdiction of an Industrial Development Authority/Special Area Development Authority/Urban Development Authority or any such Authority under State legislation.

New construction, acquisition and addition of rooms, kitchen, toilet etc. to existing dwelling as incremental housing.

• A beneficiary family will comprise husband, wife, unmarried sons and/or unmarried daughters. The beneficiary family should not own a pucca house (an all weather dwelling unit) either in his/her name or in the name of any member of his/her family in any part of India.

• An adult earning member (irrespective of marital status) can be treated as a separate household provided that he/she does not own a pucca house (an all weather dwelling unit) in his/her name and in case of married couple, either of the spouses or both together in joint ownership will be eligible for a single house, subject to income eligibility of the household under the Scheme.

• EWS Households having annual income up to Rs.3,00,000/-
• LIG Households having annual income between Rs.3,00,001/- and upto Rs.6,00,000/-
• 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.

Area which can be constructed
• Carpet area of house being constructed or enhanced under this component of the Mission should be upto 30 square meters for EWS category and upto 60 square meters for LIG category.
• Beneficiary, at his/her discretion, can build a house of larger area but interest subsidy would be limited to first Rs.6 lakh only.
• For incremental housing/extension, the area limit will be 30 and 60 of carpet area for EWS and LIG category respectively.

Subsidy and Loan details
• Maximum loan amount: as per eligibility of customer decided by bank / Financial Institution based on due diligence
• Maximum loan tenure : based on the guidelines of the PLI 
• Maximum tenure for subsidy computation: 20* years or the tenure of the loan, whichever is lower
• Maximum loan amount for subsidy calculation: Rs. 6 lakh
• Interest rate for subsidy : 6.5%
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.

Source : UPAVP
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