• Scope extended to MIG, in addition to EWS and LIG
  • MIG I eligible for 4% interest subsidy on loans up to Rs.9 lakhs
  • MIG II eligible for 3% interest subsidy on loans up to Rs.12 lakhs
  • Maximum carpet area for MIG I is 160 sq. meters and 200 sq. meters for MIG II

Launched in 2015, the Pradhan Mantri Awas Yojana (PMAY) promises to work on making affordable housing a reality by 2022. While the scheme was originally targeted at the economically weaker sections (EWS) and the lower income groups (LIG) of the society, the Union government has recently expanded its scope which now accommodates the middle-income group (MIG) as well.

In 2017, the quantum of home loan that qualifies for interest subsidies was doubled from Rs.6 lakhs to Rs.12 lakhs. If you belong to the mid-income group, this scheme can help you acquire a home, at as much as Rs.2.3 lakhs lower than the original cost.

Read on to know more about how the PMAY scheme promises to build a roof for the MIG.

Credit Linked Subsidy Scheme (CLSS)

The CLSS feature, under the PMAY scheme, was launched in 2016, with an objective to cater to the middle-income group households across the country. Under this, mid-income beneficiaries (income ranging between Rs.6 lakhs and Rs.12 lakhs) would be eligible to get a 4% subsidy on the interest applicable on a home loan of up to Rs.9 lakhs, spread over a 20-year tenor. This class has been categorized as MIG I.

Further, middle-income beneficiaries (income ranging between Rs.12 lakhs and Rs.18 lakhs) would qualify for a 3% interest subsidy on a home loan of up to Rs.12 lakhs, spread over a 20-year tenor. This class has been categorized as MIG II.

You can obviously avail additional loan beyond this limit, at non-subsidized rates of interest.

For the purpose of computing annual household income, only income earned by the husband, wife and their unmarried son(s) and/or unmarried daughter(s) will be taken into consideration. Moreover, a family will be applicable to avail the loan under this scheme only if it doesn’t have a pucca dwelling, registered in their names, in any part of the country.

The CLSS, for the MIG I category, can contribute to constructing, acquiring or renovating a pucca house (with basic civic amenities such as electricity, sewage lines, etc.), having a carpet area of maximum 160 sq. meters. On the other hand, the area limit is pegged at a maximum of 200 sq. meters for the MIG II category.

The Centre backed ‘Housing for All’ project attaches subsidies because they assume great importance when it comes to providing affordable housing to the economically weaker sections (including the middle-income group) of the society. This is because even the slightest of variations in the total cost of acquisition can make funding challenging for such price-sensitive segments and put the project beyond their reach. Subsidies, coupled with favourable housing loan interest rates, can drive demand in this particular segment and turn many dreams into absolute reality.

If you have been planning to buy a house or trying to help someone buy it, you will first have to choose the applicable MIG category. While for the MIG I category, the maximum subsidy is pegged at Rs.2.35 lakhs, its MIG II counterpart will be eligible to a maximum subsidy of Rs.2.30 lakhs.

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