Impact on the Buyers from Government’s Home Loan Subsidy Scheme
Jun 01, 2017 Home Loan
The government has recently announced the guidelines for the implementation of the credit linked subsidy scheme (CLSS) for the home loan buyers. The scheme is mainly for the middle income group (MIG) under the Pradhan Mantra Awas Yojana (Urban).
We discuss the impact it will have on the buyers.
Buyers within the income group of Rs 6 lakhs to Rs 18 lakhs per year will be eligible for the interest subsidy on the housing loans under the Pradhan Mantra Awas Yojana.
Buyer benefit:
For the benefit of the buyers, the interest subsidy of 4 percent will be given to the loan of up to Rs 9 lakhs for those whose income is less than Rs 12 lakhs. Whereas, the interest subsidy of 3 percent will be given to those whose income is more than Rs 12 lakhs up to Rs 18 lakhs per year. Housing loans above Rs 9 lakhs and Rs 12 lakhs will be at the non – subsidised rate.
At present, the credit linked subsidy scheme is available for the middle income group for the loans taken in 2017.
The subsidy will be provided if the home loan is taken for the construction of the house or the purchase of the property with the carpet area of 90 sqm for those earning up to Rs 12 lakhs and the carpet size of 110 sq meter for the individuals earning up to Rs 18 lakhs per year.
The loan tenure for the interest subsidy will be 20 years or as agreed by the buyer, whichever is lower.
The buyer will not have to pay any processing fees for the credit linked subsidy fees (CLSS) to any bank or financial institute.
Reduction in EMI:
This will further bring down the monthly EMI for the buyers. The buyers with a yearly income of Rs 9 lakhs and subsidy of 4 percent, can enjoy the reduced EMI of Rs 2,062. Whereas the buyer with 3 percent subsidy and income more than 12 lakhs, can enjoy the monthly reduction of EMI by Rs 2019.
Scheme preference:
Women, widows, working women, people of SCST, differently aided, transgender, will be enjoying the preferences in the scheme.
The government has allocated Rs 1000 crore in the union budget 2017 for the credit link subsidy scheme.
Nodal agencies for the scheme:
NHB and housing and urban development and corporation have been designated as the central nodal agencies for the implementation of the CLSS and they will reimburse the interest subsidy to the primary lending institutes.
We discuss the impact it will have on the buyers.
Buyers within the income group of Rs 6 lakhs to Rs 18 lakhs per year will be eligible for the interest subsidy on the housing loans under the Pradhan Mantra Awas Yojana.
Buyer benefit:
For the benefit of the buyers, the interest subsidy of 4 percent will be given to the loan of up to Rs 9 lakhs for those whose income is less than Rs 12 lakhs. Whereas, the interest subsidy of 3 percent will be given to those whose income is more than Rs 12 lakhs up to Rs 18 lakhs per year. Housing loans above Rs 9 lakhs and Rs 12 lakhs will be at the non – subsidised rate.
At present, the credit linked subsidy scheme is available for the middle income group for the loans taken in 2017.
The subsidy will be provided if the home loan is taken for the construction of the house or the purchase of the property with the carpet area of 90 sqm for those earning up to Rs 12 lakhs and the carpet size of 110 sq meter for the individuals earning up to Rs 18 lakhs per year.
The loan tenure for the interest subsidy will be 20 years or as agreed by the buyer, whichever is lower.
The buyer will not have to pay any processing fees for the credit linked subsidy fees (CLSS) to any bank or financial institute.
Reduction in EMI:
This will further bring down the monthly EMI for the buyers. The buyers with a yearly income of Rs 9 lakhs and subsidy of 4 percent, can enjoy the reduced EMI of Rs 2,062. Whereas the buyer with 3 percent subsidy and income more than 12 lakhs, can enjoy the monthly reduction of EMI by Rs 2019.
Scheme preference:
Women, widows, working women, people of SCST, differently aided, transgender, will be enjoying the preferences in the scheme.
The government has allocated Rs 1000 crore in the union budget 2017 for the credit link subsidy scheme.
Nodal agencies for the scheme:
NHB and housing and urban development and corporation have been designated as the central nodal agencies for the implementation of the CLSS and they will reimburse the interest subsidy to the primary lending institutes.
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