PMAY (Pradhan Mantri Awas Yojna)

What is Affordable Housing through Credit Linked Subsidy Scheme for EWS/ LIG??

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).

What is Affordable Housing through Credit Linked Subsidy Scheme for MIG?

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.

What are the income norms for various categories?

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.
When was the PMAY scheme launched by the Government for MIG?

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.

What is the process of crediting the interest subsidy?

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.

What is the role of States/ UTs/ ULBs for Affordable Housing through Credit Linked Subsidy scheme?

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.

Who are the Central Nodal Agencies (CNAs) and what is their role in disbursal of subsidy under CLSS to PLIs?
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.
Which are the PLIs through whom this interest subsidy is released or credited?

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.

Whether PLIs have to sign MoUs with CNAs for claiming subsidies?

Yes, PLIs can register with any CAN after signing MoU as provided in Annexure-I in the PMAY (U) guidelines.

How subsidy is disbursed to the CNAs?

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

Is there any preferential treatment for beneficiaries proposed for Affordable Housing through Credit Linked Subsidy Scheme?

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.

What happens when the subsidy has already been disbursed, but due to certain reasons, the construction of the house is stalled?

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.

Can a CLSS beneficiary get home loan for 30 years?

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.

How the ULBs/NGOs will be incentivized for housing loan applications for CLSS?

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.

Since the subsidy is released to the PLI post claim, does it mean that PLI has to charge the EMI on the entire loan amount and after the CLSS claim amount is released, adjust the same to the loan and thereafter calculate the revised EMI payable by the beneficiary?


Is there any limit on the loan amount to be disbursed (ticket size)?

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.

Is there any limit or upper cap on the value (Cost) of the property for which home loan can be availed? 


Where can we get list of approved Towns where the scheme is operational?

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).

The disbursal of subsidy amount is in maximum of 4 instalments whereas a builder could demand construction linked instalments in more than this number. How to deal with such cases?

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.

Whether repairing work to the existing house is covered for benefit under the Scheme?

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 guidelines for CLSS for EWS/LIG mention that "The beneficiary, at his/her discretion, can build a house of larger area but interest subvention would be limited to first Rs. 6 lakh." Please clarify.

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.

What is the situation about the charges levied by the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI)? Whether these charges are to be recovered from the beneficiary or such charges are to be borne by the PLIs.

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.

Can CLSS be clubbed with private mortgage backed guarantee fund provided by certain private players in the market?


Whether MoHUA is contemplating to share the burden, where a loan becomes NPA and the PLI concerned is unable to recover the entire outstanding amount from the beneficiaries?

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 rely on income certificates and title ownership while disbursing loans. In this scheme, self-certification is mentioned as income proof. Who will be responsible for title authenticity and income proof in such a situation?

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.

What kind of land titles will be used for loan sanctioning in cases / areas where society pattas are prevalent?

In such cases, the PLIs must satisfy themselves for sanctioning of loans and follow the due diligence documentation and approval processes.

Can refinance be taken on subsidized home loans?


What security does the borrower have to provide?

Mortgage of house to be purchased/constructed.

What does the applicant / borrower do if he/she has a grievance?

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.

What is the definition of new construction. Does it include:

1.Purchase of a new construction house from a builder
2.Purchase of a new construction house from a developer
3.Resale of a new construction house from the seller
4.Self construction by borrower on owned land

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.

Under this scheme, it needs to be clarified if the benefit would be extended to EWS/LIG applicants allotted dwelling units under a project being developed by the private sector without any association with public sector. Can a private developer have tie-ups with PLI(s) for the purpose of bringing the eligible beneficiaries within the fold of this central scheme?


Is there any State Government sponsorship or approval required for availing benefits under this scheme for Private Developers?


If in a standalone private sector led project, there are dwelling units/flats of sizes upto 60 sqm. carpet area, along with other dwelling units / flats of larger sizes; can the allottees of upto 60 sqm. size apply to the concerned PLI for 'credit linked subsidy' under the Mission?


Is resale from (builder/seller) allowed under CLSS?

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.

Is there a format for furnishing End-use certificate?

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.

Can NRIs be considered under this scheme?

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.

Please clarify on MOU format, para E7, 'the lender/second party will monitor the construction of the dwelling units financed under the scheme, including the approvals for the building design, infrastructure facilities etc. as also the quality of the construction and verify through site visits etc. the expenditure incurred upto different stages of construction'. As it is incumbent upon Third Party Quality Monitoring Agencies (TPQMA) to monitor and assure the quality of the PMAY (U) Mission, it is felt that the overlapping duty bestowed on the PLIs may be clarified owing to the expert monitoring agency established.

Third Party Quality Monitoring Agencies (TPQMAs) are responsible for ensuring the quality of construction under the vertical of the PMAY (U), other than CLSS.

Is the involvement of banks required only in affordable housing through Credit Linked Subsidy Scheme or in other verticals of PMAY (Urban) also?

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.

Do the processing charges on home loans include service charge component?

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.

Whether PLIs can fix the repayment tenure of more than 20 years to benefit eligible loanees under the scheme?

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.

Is there any specified format for customers self-declaration for Manual Scavengers, women with over-riding preference to widows), persons belonging to SC/ST/OBC/Minorities/ PwD/ Transgenders?

Certification procedure/ formats adopted by appropriate Government bodies will be adopted.

Some banks / Financial Institutions are interpreting the condition envisaged in paragraph 1.3 of the guidelines to decline / not entertain applications from potential beneficiaries seeking housing loans for addition of room, kitchen, toilet etc. to their existing dwelling units as incremental housing under paragraph 3.3 of the guidelines, solely on the ground that the applicant is already possessing a pucca house. Is this interpretation correct?

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.

Will the clarifications/ FAQs supersede the Guidelines?

The clarifications/ FAQs are to be read along-with the Scheme Guidelines.

Credit linked subsidy is applicable for what category of customer profiles?

Credit linked subsidy is generally available for Salaried and Self-Employed persons.

How can beneficiaries assess his/her Loan eligibility?

The loan eligibility of the applicant can be assessed by the PLIs based on internal guidelines and processes as amended from time to time.

What is the maximum tenure on which the credit linked subsidy is applicable?

The credit linked subsidy is available for a maximum tenure of 20 years or the actual tenure of loan, whichever is less.

Is there any loan amount limit for CLSS availing benefit under?

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.

Are there any additional eligibility norms apart from income, first pucca house and carpet area norms?

The property on which the subsidy is to be availed has to have

1.Basic amenities such as water, sanitation, sewerage, roads, electricity etc.
2.Property must be located at Statutory Towns as per Census 2011 and towns notified subsequently, including Notified Planning/ Development Areas.

Can a single woman get a benefit under PMAY-U CLSS component?

Yes, provided all other eligibility conditions are met.

Can a beneficiary having his/her own business; avail Home Loan under CLSS?

Yes, beneficiary can avail this facility, subject to meeting the income and other criteria defined under this scheme.

If a beneficiary owns a plot but does not have a house, can she/he eligible for the subsidy under CLSS for home loan availed for construction on that plot?


Can beneficiary calculate CLSS subsidy for EWS/LIG, MIG-I and MIG -II?

Beneficiaries can calculate their subsidy at the subsidy calculator provided at CLSS Awas Portal (CLAP).

Can an unmarried adult earning person is eligible for CLSS subsidy?

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.

Is CLSS is applicable for properties in rural areas?