CLSS Frequently Asked Questions
Disclaimer: The Frequently Asked Questions (FAQs) and the responses hereunder are a synopsis of the queries/ clarifications raised by stakeholders over time. These are for general information and guidance only. These questions and responses have been framed keeping in view possible doubts that may arise and are not based on individual cases; therefore, it is not to be taken as a final view of the Ministry on the extant provisions of the Credit Linked Subsidy Scheme under Pradhan Mantri Awas Yojana (Urban)-Housing for All Mission.
Under Credit Linked Subsidy Scheme, beneficiaries of Economically Weaker Section (EWS) and Low-Income Group (LIG) can seek housing loans from Banks, Housing Finance Companies and other such institutions for acquisition/construction of house and enhancement to existing dwellings as incremental housing. The credit linked subsidy will be available only for loan amount upto Rs 6 lakhs and such loans would be eligible for an interest subsidy at the rate of 6.5 % for tenure of 20 years or during tenure of loan whichever is lower. The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9%. Any additional loan amount beyond Rs. 6 lakhs will be at non subsidized rate. Interest subsidy will be credited upfront to the loan account of beneficiaries through Primary lending institutions resulting in reduced effective housing loan and Equated Monthly Instalment (EMI).
Under Credit Linked Subsidy Scheme, beneficiaries of Middle-Income Group (MIG) can seek housing loans from Banks, Housing Finance Companies and other such institutions for acquisition/ construction of house (including re-purchase). The credit linked subsidy will be available only for loan amounts upto Rs. 9 lakhs for MIG-I and Rs 12 lakhs for MIG-II and such loans would be eligible for an interest subsidy at the rate of 4 % and 3% respectively for a tenure of 20 years or during tenure of loan whichever is lower. The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9%. Any additional loan amount beyond the limit will be at non-subsidized rate. However, the carpet area of the house should be strictly restricted within the permissible carpet area of 160 sq m and 200 sq m for MIG-I and MIG-II categories respectively.
The income norms for various Household categories are defined as under:
- EWS households with an annual income up to Rs. 3 lakh.
- LIG households with an annual income more than Rs. 3 lakh and up to Rs. 6 lakh.
- MIG I households with an annual income more than Rs.6 lakh and up to Rs.12 lakh.
- MIG II households with an annual income more than Rs. 12 lakh and up to Rs. 18 lakh.
CLSS under vertical of Pradhan Mantri Awas Yojana -Urban for Middle Income Groups was launched by the Government of India with the effect from January 1, 2017.
The subsidy is released by the CNAs based on the disbursements made by PLIs to the beneficiaries. Subsidy, disbursed by the CNA to the PLI, is credited by the PLI to the borrower's home loan account upfront by deducting it from the principal loan amount. As a result, the borrower will pay EMI on the remainder of the principal loan amount. E.g. if borrower avails a loan for Rs. 6.00 lakhs and subsidy thereon works out to approximately Rs. 2.67 lakhs, the amount (Rs. 2.67 lakhs) would be reduced upfront from the loan (i.e., the loan would reduce to Rs. 3.33 lakhs) and the borrower would pay EMIs on the reduced amount of Rs. 3.33 lakhs for the remaining tenure of the loan.
Role of States/UTs/ULBs under this vertical would be as under:
- States/UTs/ULBs/PLIs shall ensure link beneficiary identification through Aadhaar for de-duplication. State Level Nodal Agency (SLNA) identified by State/UT for implementing the PMAY(U) will facilitate the identified eligible beneficiaries in getting approvals and documents, etc. to avail of Credit Linked Subsidy Scheme.
As of now, HUDCO, NHB and SBI have been identified as CNAs to channelize the credit linked subsidy to the PLIs and monitor the progress of CLSS. Ministry may notify other Institutions as CNA in future.
Primary Lending Institutions such as Scheduled Commercial Banks (SCB), Housing Finance Companies (HFCs), Regional Rural Banks (RRBs), State Cooperative Banks, Urban Cooperative Banks (Scheduled as well as Non-scheduled), Small Finance Banks (as approved by the Reserve Bank of India) and Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs) (as registered with Reserve Bank of India) which have signed MoUs with any one of the CNAs.
Yes, PLIs can register with any CAN after signing MoU as provided in Annexure-I in the PMAY (U) guidelines.
An advance subsidy is released to each CNA at the start of the scheme. Subsequent amount of credit linked subsidy will be released to the CNAs after 70% utilization of earlier amounts based on claims raised by CNAs.
Yes, Preference under the CLSS will be given to Manual Scavengers, Women (with overriding preference to widows), persons belonging to Scheduled Castes/ Scheduled Tribes/ Other Backward Classes, Minorities, Persons with disabilities and Transgenders subject to beneficiaries being from EWS / LIG, MIG -I & II segments as applicable.
In cases where the construction of house is not completed within 36 months from the date of release of the first disbursement, subsidy is to be recovered by the PLI and refunded to the CNA who had released the subsidy.
Yes, beneficiary can avail home loan for tenure of 30 years, which would depend on the due diligence norms of the PLIs concerned. However, in such cases, the interest subsidy would be restricted on home loans upto the limits allowed for the respective income categories for tenure not more than 20 years.
For facilitating applicants in submission of their applications in proper form and certificates, and to incentivize designated staff of ULBs/NGOs, a sum of Rs. 250/- per sanctioned application under EWS/LIG would be paid out of CLSS funds, payable through State Governments.
No. Loan amount will depend upon the credit due diligence of the PLI. However, the credit linked subsidy will be available only for loan amounts up to Rs. 6 lakhs for EWS/LIG, up to Rs. 9 lakhs for MIG-I and Rs. 12 lakhs for MIG-II and additional loan amount beyond these limits, if any, will be at non-subsidized rates.
The list of Statutory Towns along with any other towns notified subsequently is provided through CNAs and may be accessed on the website of the CNAs and PMAY(U).
In such cases, the number of disbursal instalments can be decided based on the discussions between CNAs and PLIs for availing the benefit under the CLSS, provided all other requirements of the scheme are complied with.
Repairing work to the existing house can be undertaken only for the houses which are kutcha, semi pucca and require extensive renovation to make it into a pucca house. (only in case of EWS and LIG categories)
The purchase/construction of a new house can be undertaken as per the scheme guidelines. For extension/repair, the carpet area limit will be 30 sq.m. and 60 sq.m. for EWS and LIG category respectively.
Presently, charges levied by CERSAI are being recovered from the concerned borrower/ beneficiary and the CLSS is independent of the same. However, PLIs may take a suitable decision at their end.
It is the responsibility of the PLIs to carry out due diligence of the borrower as per their due diligence norms and as such recovery of NPAs, if any, is their responsibility. However, where the construction of the unit is stalled due to any reason, the subsidy released by MoHUA is to be recovered along with loan recovery by the PLI.
PLIs have to adopt their own due diligence process while sanctioning loans. While disbursing subsidy, a self-certificate / affidavit as proof of income will be taken from the beneficiary for the purpose of interest subsidy. PLIs can resort to the remedies available under IPC and other relevant statutes in case of any fraudulent submission by the beneficiary.
In such cases, the PLIs must satisfy themselves for sanctioning of loans and follow the due diligence documentation and approval processes.
Mortgage of house to be purchased/constructed.
In case of grievance, the applicant / borrower should first approach the concerned PLI through the PLI’s grievance redressal system as per details provided on the respective PLI’s website.
All four instances mentioned in the question are covered under the definition of a new construction and are eligible for credit linked subsidy, within the prescribed terms and conditions, as applicable.
Resale cases would be allowed but it is incumbent upon banks to adopt their due diligence and banking mechanism processes to curtail speculative cases in this scenario.
CNAs and PLIs may monitor this aspect based on their own due diligence process for granting loans. PLIs may also discuss and finalize this format in consultation with CNAs.
NRIs can be considered provided they are eligible under the Scheme Guidelines and are also in compliance with other GoI/RBI rules, if any, applicable to NRIs.
Third Party Quality Monitoring Agencies (TPQMAs) are responsible for ensuring the quality of construction under the vertical of the PMAY (U), other than CLSS.
Banks involvement is primarily in CLSS vertical of the PMAY (U) only. As far as the other verticals are concerned, the banks are free to be involved; however, no Government of India support/ subsidy is prescribed in the scheme guidelines.
The lump sum amount paid per sanctioned application to PLIs in lieu of processing charge for housing loan is all inclusive, including all taxes/levies.
The interest subsidy will be for tenure of 20 years or during the tenure of the loan whichever is lower. PLIs can fix the repayment tenure of more than 20 years, but the interest subsidy will be calculated for tenure upto 20 years.
Certification procedure/ formats adopted by appropriate Government bodies will be adopted.
In the case of EWS/LIG, declining to entertain an application for enhancement/ incremental housing under the PMAY (U) solely on the ground that the individual has a pucca house is an incorrect interpretation of the Scheme Guidelines. It is clarified that the condition that the beneficiary should not own a pucca house either in his/ her name or in the name of any member of his/her family in any part of India, is not to be applied to cases of enhancement/ incremental housing as long as the enhancement/ incremental housing is with regard to existing lone pucca house owned by the beneficiary, and is within the carpet area limits prescribed under the Scheme.
The clarifications/ FAQs are to be read along-with the Scheme Guidelines.
Credit linked subsidy is generally available for Salaried and Self-Employed persons.
The loan eligibility of the applicant can be assessed by the PLIs based on internal guidelines and processes as amended from time to time.
The credit linked subsidy is available for a maximum tenure of 20 years or the actual tenure of loan, whichever is less.
No, there is no loan amount limit for loan accounts which are booked under CLSS. However, subsidy will be restricted to the loan amount of Rs. 6 Lakh /9 Lakh and Rs.12 Lakh for EWS/LIG, MIG-I & MIG-II respectively.
The property on which the subsidy is to be availed has to have
- Basic amenities such as water, sanitation, sewerage, roads, electricity etc.
- Property must be located at Statutory Towns as per Census 2011 and towns notified subsequently, including Notified Planning/ Development Areas.
Yes, provided all other eligibility conditions are met.
Yes, beneficiary can avail this facility, subject to meeting the income and other criteria defined under this scheme.
Beneficiaries can calculate their subsidy at the subsidy calculator provided at CLSS Awas Portal (CLAP). https://pmayuclap.gov.in/
Yes. He/she can be considered as a separate household provided he/she avails the loan only in his/her own name and is also the sole owner of the property for which the loan is availed.
