Pradhan Mantri Awas Yojana: Home Loan Subsidy Extended for Middle Income Group

In what is certainly good news for India’s middle class, the Central Government has decided to extend the timeline for the Credit Linked Subsidy Scheme or CLSS. Earlier, the CLSS was supposed to expire on March 31, 2019. Now, the ‘housing for all’ program has been extended by a full year and will run till 2020.

Hardeep Singh Puri, who is a senior Union minister in charge of Urban Housing Schemes made the declaration in the national capital recently. Puri had earlier hinted that the Pradhan Mantri Awas scheme would last for longer than it was initially announced.

Now, more people will be able to avail a lower home loan interest rate thanks to the scheme’s extension.

The minister made another revealing insight. He said that till March 2019, more than 3.3 Lakh people had taken advantage of the Pradhan Mantri Awas Yojana loan to build their own homes.

Earlier, most of them could not afford to take a home loan because the interest rates were too high. Now, with the PMAY in place, both urban and rural housing projects are accelerating faster due to ready funds from most financial institutions.

The CLSS Scheme

The Government’s pet PMAY project was first introduced in June 2015, one year after the new Government was sworn in. Since India has a longstanding history of perennial housing shortage, the step was seen as an ambitious plan to create more options towards affordable homes for the section of the populaHello Priya,

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Based on incomes, the Government also created separate income categories, each of which come with respectively better different financial benefits. With the CLSS scheme, the PMAY eligibility became simpler.

Under the scheme, those who had:

  • Families with incomes between Rs. Six Lakh but lower than Rs. Twelve Lakh could avail housing loan of up to Rs. Nine Lakh with a repayment tenor of 20 years. The Government would provide an interest subsidy of 4%. All individuals under this income scheme fall under the lower spectrum of MIG or Middle Income Group. As per Pradhan Mantri Awas eligibility, individuals with comparatively lower incomes could now afford to buy their own homes.
  • Families with incomes between Rs. Twelve Lakh and Rs. Eighteen Lakh were eligible for a 3% cut in the interest rate on the same amount with similar tenors. The Government rightly believed that it would bring more people under the PMAY eligibility umbrella.

Who Will Benefit from the Extension?

Studies have shown that a significant percentage of people who earn in these income brackets live in urban or semi-urban cities. They are the ones who will benefit the most.

If you are planning to avail a home loan soon, make sure you check your chances using the home loan eligibility calculator.

Most respected financial institutions and NBFCs provide significant amounts as loan for housing. Home loans have the potential to challenge the largely urban housing crisis which affects most of India’s largest cities. Mumbai and Delhi, besides the NCR, have a large number of people who live in slums without any rights to their property. That is where the Government and private sector players can come in to create affordable housing solutions.

In turn, it will lead to more concrete structures being built across the country and help lift millions of people from poverty.

The minister has also confirmed that the Government will set aside a larger amount of revenue in the next budget to allocate for the Pradhan Mantri Awas program. You too can utilise this positive step for your future and avail a home loan from a recognised financial institution. Make sure to use a home loan EMI calculator to plan your finances and enjoy better living standards without fail.

Also Read: What Essential Things To Know About PMAY?


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