NEW DELHI: Last week the government announced it would revise the carpet area of houses eligible for the Credit-Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (Urban) for middle-income groups (MIG). The industry hailed the move aimed at reviving the housing market. Take a look at how the scheme would help a first-time home buyer avail the benefit.
Benefits under CLSS
Under CLSS, 4 per cent interest subsidy was available for loans up to Rs 9 lakh for people with an annual income between Rs 6-12 lakh (or MIG-I category), while 3 per cent interest subsidy was given for loans up to Rs 12 lakh to people with income between Rs 12-18 lakh per annum (MIG-II).
However, the scheme was applicable only for homes with a carpet area of 120 square metres (1,291 sq ft) for MIG-I category and 150 square metres (1,614 sq ft) for MIG-II. Now, this has been increased up to 160 square metres (1,722 sq ft) for first-time home buyers in MIG-I category and up to 200 square metres (2,152 sq ft) for those in MIG-II.
Further under the scheme, a beneficiary can avail subsidy up to Rs 2.35 lakh, which is applicable for first-time home buyers till March 31, 2019.
The subsidy, once released, would be directly credited to the borrower’s account and adjusted against the principal loan amount. Hence, the outstanding principal of loan will get reduced, resulting in reduced Equated Monthly Installments.
Experts claim that the enhanced carpet area will give a major boost to first-time home buyers, especially those in metro cities, as the revised specification will cover a large number of flats constructed in such cities.
“The latest relaxation allows a large proportion of housing, particularly in Tier-1 cities, to be covered under the scheme. This will not only enable more home buyers to avail the subsidy and other incentives, but also help bolster construction activities in the affordable housing sector,” said Anshuman Magazine, chairman (India and South East Asia), CBRE.
Who is eligible under Pradhan Mantri Awas Yojna?
People belonging to Economically Weaker Sections (EWS), Low-Income Group (LIG), Middle-Income Group-I and Middle-Income Group-II
Applicants aged: 70 years or less
EWS applicants with income range below J3 lakh per annum and LIG applicants with income range between J3 lakh and 6 lakh per annum
MIG applicants with household income not exceeding J18 lakh/annum