Housing for All

Housing for All

When the Modi government took charge after the 2014 general election, one big promise they made was ‘housing for all’. Their mission was to provide a house for everyone by 2022. The housing loan interest rates have been scaring the hell out of people and we all are looking for a solution to save our hard-earned money vanishing into thin air in the name of home loan interest.

Today their term has reached the peak and the campaign is looking promising as the Modi government is well on its way to achieve the goal.  The good news is that this home loan plan under the Pradhan Mantri Awas Yojna aimed at urban poor falling under Economically weaker section (EWS) or the Lower income groups. This plan falls under the Credit Linked subsidy scheme (CLSS).

So, we thought we must spread more awareness about this program, because that’s what we do! Today we have in store for you, an all you need to know kit about the PMAY CLSS.

First, let’s discuss what all this subsidy comprises of, how is it calculated and how much can people benefit from this.

A Net Present Value (NPV) of the interest subsidy amount will be calculated at a discount rate of 9%. The subsidy will be credited to the loan account of beneficiaries through banks and other lending institutions which will eventually reduce the housing loan and the EMIs.

This program is surely going act as a relief for the lower income groups and people from the economically weaker section. According to the scheme if an individual is eligible, the interest subsidy will be given for a tenure of 20 years or the tenure of the loan whichever is lower at a rate of 6.5%. An important condition is that the subsidy is available only for loan amounts up to 6 lacs only, any additional amount will not be eligible. If the borrower qualifies for the scheme the subsidy will be credited to their loan account and will be deducted from the principal loan amount. The borrower will have to pay the remaining amount as per the interest levied on it through EMIs.

Now, let’s discuss the eligibility for this scheme in detail:


  • The CLSS scheme can be availed by a beneficiary family which comprises of husband, wife and unmarried children
  • According to the guidelines the house bought with the help of the loan should be in the name of the female head in the household or in the joint name of both husband and wife
  • The beneficiary must not have a pucca house in their name of any member of a family in any part of India.
  • Individual with an annual income of INR 3 lacs falls under the EWS (economically weaker section) category
  • Individual with an annual income between 3 lacs and 6 lacs falls under the LIG (lower income group) category


There is curtailment on the carpet area of the houses that will be constructed under the subsidy. The house must be up to 30 square meters for EWS category and 60 square meters for LIG. Even if an individual builds a larger house, the grant of subsidy will be limited to INR 6 lacs only. The good thing is that the government has also allowed addition of rooms to existing houses under this scheme.


In order to apply one can, visit any of the following branches of Primary lending Institutions:

  • Commercial Banks
  • Regional rural banks
  • Housing Finance companies
  • State cooperative banks
  • Small Finance banks (approved by urban cooperative banks)
  • Registered Non-Banking Financial company- Micro Finance Institutions


As per the scheme no processing fee will be charged from the borrower if he/she opts for a housing loan up to 6 lacs, in case the loan is beyond 6 lacs then regular processing fee will be imposed.


  • Aadhaar, voter ID card or any other unique ID
  • Certificate of house ownership from revenue authority of native district
  • Self-certificate/ affidavit as Income proof (for identification of EWS or LIG category)

The Pradhan Mantri Awas Yojna is an important part of growth and evolution of a large chunk of our population and the subsidy will help build houses for a huge amount of people who struggle meet the month’s end. It is of utmost importance that we spread awareness about this scheme so that a person who needs this facility can opt for it. Let’s help build our nation, a place where no one must sleep without a roof above their head.

(Data source : Financial Express)


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