Good news for all home loan applicants. The government of India has announced a subsidy on Interest up to 2.25 percent on home loans. This subsidy is only applicable for the applicants with an annual income of Rs 6 Lakh to Rs 18 lakh per annum. This subsidy will be issued under Credit Linked Subsidy Scheme for Middle Income Groups (CLSS-MIG) initiated by Ministry of Housing and Urban Poverty Alleviation.

PM Modi has already announced subsidy interest on housing and home loans for 4 per cent. The subsidy is eligible for loans not exceeding Rs 9 lakh for applicants with annual income less than Rs 12 lakh. Also, PM has announced 3 per cent subsidy on housing loans up to ₹12 lakh for those with income up to ₹18 lakh per year.

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“Those who have been sanctioned housing loans and whose applications are under consideration since January 1 this year are also eligible for interest subsidy. Large scale incentivisation of affordable housing will boost real estate sector, resulting in employment generation as well,” says Venkaiah Naidu.

The guidelines state that the loan tenure has been capped at 20 years. The total interest subsidy building up on these loans will be paid to the beneficiaries which reduce the EMI.

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The total interest subsidy for MIG applicants on a loan of Rs 12 lakh comes Rs 2.30 lakh per beneficiary. And on a Rs 9-lakh loan, it comes to Rs 2.35 lakh per beneficiary. Interest subsidy will be issued on loans for acquisition or construction of a house with a carpet area up to 90 sqm and with earning Rs 12 lakh per annum. Applicants with earning up to Rs 18 lakh per year can avail the subsidy on the house with a carpet area up to 110 sqm.

Housing and Urban Development Corporation (HUDCO) and National Housing Board (NHB) have been designated as Central Nodal Agencies for implementing CLSS. The lenders will sanction loans after verification of applications and then claim the subsidy from the nodal agencies. Eligible beneficiaries under CLSS can apply directly to the lending institutions.


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