Credit Linked Subsidy Scheme (CLSS): everything you want to know

In the year 2015, India’s Prime Minister Narendra Modi launched the Pradhan Mantri Awas Yojana (PMAY) initiative. The initiative aimed to provide affordable housing to the urban poor population in India by 2022. The slum majorly focuses on slum rehabilitation, Credit Linked Subsidy Scheme (CLSS), houses affordable for all, and a subsidy to survey-led independent house renovation.

At present, the Indian Government have implemented CLSS as a central sector scheme. The remaining are sponsored plans.

How are CLSS and a home loan connected?

• Through the CLSS policy, the Indian Government aims to increase the credit flow in financial institutions to meet the housing dreams of the urban poor population

• The policy also focuses on demands concerning affordable housing finance segment

• Two central nodal agencies have implemented the CLSS policy: Housing Urban Development and National Housing Bank

• Around 70 banking and non-banking institutions such as housing finance companies, small financial banks, regional banks and scheduled commercial banks have collaborated with NHB

• The Lower Income Group (LIG) and Economically Weaker Section (EWC) can avail the benefits of CLSS

• The scheme was designed to provide home loan interest rate concession, especially if you take it from institutions which fall under the PMAY scheme

• The tenure of a CLSS housing loan is generally 20 years, and you can avail of the subsidy for a loan amount up to INR 6 lakh

What are the features of CLSS for EWC and LIG?

• The home loan amount should be up to INR 6 lakh, to avail of the CLSS policy. If the amount exceeds the given limit, you are not entitled to any subsidy

• You receive a maximum subsidy of up to INR 2.67 lakh

• The scheme is applicable only to construct or purchase a house

• You are eligible for the policy if you do not have a ‘pucca' house under your name or the name of your family member

• If any beneficiary family has availed central services from the Indian Government earlier under any of the housing loans, they cannot benefit from CLSS policy

• There are no processing fees charged by the institutions when applying for CLSS

The CLSS policy is ideal for the needy groups as most of the time their dreams of purchasing a house under their name remains a dream throughout their lives. CLSS aids in making their dreams a reality.