Di­rect loan sub­sidy for home buy­ers

DE­MAND BOOST Home buy­ers to get di­rect loan sub­sidy for buy­ing af­ford­able hous­ing un­der the CLSS-MIG

Hindustan Times (Chandigarh) - Estates - - ESTATES - HT Es­tates Cor­re­spon­dent ht­es­tates@hin­dus­tan­times.com

The hous­ing sec­tor is set for a de­mand boost in the af­ford­able seg­ment from the mid­dle in­come group (MIG) home buy­ers as the credit linked in­ter­est sub­sidy scheme for mid­dle in­come groups (CLSS-MIG) gets into im­ple­men­ta­tion mode. The long-awaited guide­lines for the scheme were fi­nally an­nounced this week. The scheme was launched in De­cem­ber last year.

The scheme

Prime Min­is­ter Naren­dra Modi had an­nounced in­ter­est sub­sidy of 4% on hous­ing loans of up to R9 lakh of those with an in­come of R12 lakh per year and of 3% on hous­ing loans of up to R12 lakh of those earn­ing

R18 lakh per year.

Who is el­i­gi­ble?

Mid­dle in­come groups (MIG) with an­nual in­comes of above

R6 lakh and up to R18 lakh per year are el­i­gi­ble for in­ter­est sub­sidy on hous­ing loans un­der the new CLSS (MIG). Those who have been sanc­tioned hous­ing loans and whose ap­pli­ca­tions are un­der con­sid­er­a­tion since Jan­uary 1 this year are also el­i­gi­ble for in­ter­est sub­sidy. Hous­ing loans above R9 lakh and R12 lakh will be at non-sub­sidised rates.

While defin­ing the ben­e­fi­ciary fam­ily as com­pris­ing hus­band, wife and un­mar­ried daugh­ters and sons, even un­mar­ried and earn­ing young adults have been made el­i­gi­ble for tak­ing the ben­e­fit of in­ter­est sub­sidy un­der CLSS(MIG), for ac­qui­si­tion or con­struc­tion of a new house, in­clud­ing re­pur­chase. Un­der the guide­lines, pref­er­ence is to be given to women with over­rid­ing pref­er­ence to wid­ows, sin­gle work­ing women, per­sons be­long­ing to Sched­uled Castes and Sched­uled Tribes, Back­ward Classes, dif­fer­ently-abled and trans­gen­der peo­ple.

Loan ten­ure

In the guide­lines for CLSS (MIG), the ten­ure of loan has been stip­u­lated to be 20 years or that pre­ferred by the ben­e­fi­ciary, whichever is lower.

Di­rect ben­e­fit

The to­tal in­ter­est sub­sidy ac­cru­ing on these loan amounts will be paid to the ben­e­fi­cia­ries up front in one go thereby re­duc­ing the bur­den of equated monthly in­stall­ment (EMI). The to­tal in­ter­est sub­sidy to be paid to MIG peo­ple on R9 lakh loan comes to R2.35 lakh and on a loan of R12 lakh, it comes to R2.3 lakh per ben­e­fi­ciary.

Loan quan­tum

In­ter­est sub­sidy will be pro­vided on loans for the con­struc­tion or ac­qui­si­tion of house with car­pet area of 90 sq m by those earn­ing R12 lakh per an­num and of 110 sq m by those earn­ing R18 lakh per year.

Nodal agen­cies

Na­tional Hous­ing Bank (NHB) and Hous­ing and Ur­ban De­vel­op­ment Cor­po­ra­tion (HUDCO) have been des­ig­nated as Cen­tral Nodal Agen­cies (CAN) for im­ple­men­ta­tion of CLSS for both MIG and EWS/ LIG who will re­im­burse in­ter­est sub­sidy to pri­mary lend­ing in­sti­tu­tions (PLIs) based on the loans ad­vanced to ben­e­fi­cia­ries by PLIs. PLIs in­clude sched­uled com­mer­cial banks, hous­ing fi­nance com­pa­nies, small hous­ing banks, state and ur­ban co­op­er­a­tive banks, re­gional ru­ral banks and NBFC-MFI.

Fi­nan­cial In­sti­tu­tions

Small fi­nance banks and non bank­ing fi­nance com­pany-mi­cro fi­nance in­sti­tu­tions have been recog­nised to func­tion as pri­mary lend­ing in­sti­tu­tions to widen the scope of im­ple­men­ta­tion of CLSS(MIG) in ad­di­tion to sched­uled com­mer­cial banks, hous­ing fi­nance com­pa­nies, re­gional ru­ral banks, state and ur­ban co­op­er­a­tive banks for ac­cept­ing ap­pli­ca­tions di­rectly from ben­e­fi­cia­ries and ad­vanc­ing loans.

Seventy lend­ing in­sti­tu­tions, in­clud­ing 45 hous­ing fi­nance com­pa­nies, 15 sched­uled banks, two re­gional ru­ral banks, one co­op­er­a­tive bank, four small fi­nance banks and three non­bank­ing fi­nance com­pa­nies-mi­cro fi­nance in­sti­tu­tions have signed mem­o­randa of un­der­stand­ing with NHB for im­ple­ment­ing the CLSS (MIG) com­po­nent of PMAY (Ur­ban).

While the new CLSS (MIG) cov­ers peo­ple with in­come of up to R12 lakh and R18 lakh per year, the CLSS com­po­nent of PMAY (Ur­ban) launched in June 2015 and ap­pli­ca­ble to eco­nom­i­cally weaker sec­tions (EWS) and low in­come group (LIG) cov­ers ur­ban poor with in­come lev­els of R3 lakh and R6 lakh per year, re­spec­tively. Un­der CLSS (EWS/ LIG), in­ter­est sub­sidy of 6.5% is be­ing pro­vided on a loan of up to R6 lakh. The ten­ure of this loan is now in­creased to 20 years from the ear­lier 15. To­tal in­ter­est sub­sidy avail­able to each ben­e­fi­ciary un­der this com­po­nent is R2.3 lakh.

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