PMAY CLSS EWS LIG new subsidy calculator: With the Modi government well on its path towards accomplishing the ‘Housing for All’ mission by 2022, if you are looking to have a home of your own, this could be the right time. One can apply for a subsidised home loan under the Pradhan Mantri Awas Yojana (Urban) scheme (PMAY) aimed at urban poor falling under Economically Weaker Section (EWS) or the Low Income Group (LIG) category. The home loan comes at a subsidised interest rate under the Credit Linked Subsidy Scheme (CLSS) of the government.
Here are a few things to keep a note of while applying for a home under PMAY (Urban)-EWS/LIG scheme with CLSS benefit.
The CLSS benefit can be availed by the beneficiary family comprising of husband, wife and unmarried children. The beneficiary the family should not own a pucca house either in his or her name or in the name of any member of his or her family in any part of India. Also, as per the PMAY guidelines, the house constructed by availing loan under this scheme should be in the name of the female head of the household or in the joint name of the male head of the household.
For claiming subsidised loan, the benefit is restricted to a certain income level of the individuals. Those with an annual income of up to Rs 3 lakh fall under EWS category while those with an annual income between Rs 3 lakh and Rs 6 lakh fall under LIG category.
How much is the subsidy
For both EWS and LIG individuals, if they are eligible, the interest subsidy is at the rate of 6.5 per cent for a maximum tenure of 20 years or during the tenure of loan whichever is lower. Also, the credit linked subsidy will be available only for loan amounts up to Rs 6 lakh and any additional loan will not be eligible for subsidy.
How is the subsidy calculated
The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9 per cent. 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).
How is the subsidy adjusted
The subsidy will be credited by the bank to the borrower's account upfront by deducting it from the principal loan amount of the borrower. The borrower will pay EMI as per lending rates on the remainder of the principal loan amount.
PMAY Subsidy example
The borrower avails a loan for Rs. 6 lakh and subsidy thereon works out to approximately Rs. 2.67 lakh, the amount (Rs. 2.67 lakhs) would be reduced upfront from the loan (i.e., the loan would reduce to Rs. 3.33 lakh) and the borrower would pay EMIs on the reduced amount of Rs. 3.33 lakh.
Carpet area restriction
To avail the credit-linked subsidy, the carpet area of houses being constructed has to be up to 30 square metres and 60 square metres for EWS and LIG, respectively. One may, however, build a larger house, but the interest subvention would be limited to Rs.6 lakh only. Importantly, the credit-linked subsidy can be availed not only for housing loans are taken for new construction but also for the addition of rooms etc. to existing dwellings as incremental housing.
How to apply
To apply, one may approach any of the Primary Lending Institutions (PLI) in one’s area such as scheduled commercial banks, housing finance companies, regional rural banks (RRBs), State cooperative banks, Urban cooperative banks approved Small Finance Banks or registered Non-Banking Financial Company-Micro Finance Institutions. The beneficiary can apply for a housing loan directly or through the Urban Local Bodies (ULB) or the local agencies identified by the State or ULBs for facilitating the applications from intended beneficiaries. It’s better to contact your nearest bank or the bank where you hold your savings account.
Banks will link beneficiary's identification to Aadhaar, Voter card or any other unique identification. One may arrange a certificate of house ownership from Revenue Authority of one’s native district. For identification as an EWS or LIG beneficiary under the scheme, an individual loan applicant will have to submit self-certificate or an affidavit as proof of income.
As per the guidelines, banks are not allowed to take any processing charge from the beneficiary for housing loans up to Rs. 6 lakh, but for additional loan amounts beyond Rs. 6 lakh, the banks can charge a normal processing fee.