Housing for all Indians by 2022 is one of the commitments of the given by the government. To this effect, the Pradhan Mantri Awas Yojana (Urban) was launched in 2015 with the aim of making housing affordable for the Urban Poor. This scheme focuses at 4 major areas 

  • Slum Rehabilitation 

  • Credit Linked Subsidy Scheme 

  • Subsidy for beneficiary supported house construction and or enhancement 

  • Affordable Housing schemes with private partnership 

Among the focus areas, the Credit Linked Subsidy Scheme is meant to be implemented as a central scheme and aims to increase the flow of credit to financial institutions. Consequentially, the scheme aims to make housing affordable for the Economically Weaker Section (EWS), Low Income Group (LIG) and Middle-Income Group (MIG). The household income criteria for each of the group is as below 

  • Economically Weaker Section and LIG : up to Rs 6,00,000 per annum 

  • Middle Income Group I                          : Rs 6,00,001- Rs 12,00,000 p.a 

  • Middle Income Group II                         : Rs 12,00,001 -Rs 18,00,000 p.a 

Let us now see how the scheme runs and who is eligible for a home loan subsidy? 

In this scheme, an individual avails credit from a financial institution in the normal fashion but if he/she meets all conditions of the Home Loan Subsidy scheme, then a subsidy is provided on the loan by the central government which effectively works on reducing the burden on the home loan aspirant.  

The loan amounts and other conditions differ depending upon the category of the applicant like EWS, LIG or MIG. The eligibility and other conditions are presented in a tabular format for your easy understanding.  

 

 

Subsidy eligible for loan availed after 

Max loan tenure 

Max carpet area allowed for the home 

Purpose of the loan 

Validity of the scheme 

Interest subsidy 

Subsidy calculated on max loan amount of 

Max subsidy amount 

EWS/LIG 

17 June 2015 

20 yrs 

60sqmtrs 

Construction/Purchase 

/Extension 

31 Mar 2022 

6.5% 

Rs 6,00,000 

Rs 2.67lakhs 

MIG I  

01 January 2017 

20 yrs 

160sqmtrs 

Purchase/Construction 

31 Mar 2019 

4.0% 

Rs 9,00,000 

Rs 2.35 lakhs 

MIG II 

01 January 2017 

20 yrs 

200sqmtrs 

Purchase/Construction 

31 mar 2019 

3.0% 

Rs 12,00,00 

Rs 2.3 lakhs 

 

In addition to these criteria there are a few other eligibility conditions which include those beneficiary families which already have a pucca house are not eligible for this subsidy. The beneficiary families are defined as husband, wife and unmarried children.  

Additional Reading: Housing for All - How to Get the Cheapest Home Loans?

In the case of married couples, the subsidy is valid only if the house is purchased in the name of the lady of the household. However it cannot be claimed in the case of home extension.  . For the MIG category, the ownership could be joint or in individual names.  

The loan has to be availed from only approved bank or lending institution which has an agreement with National Housing Bank (NHB) or Housing and Urban Development Corporation which is approved agency for providing subsidies. From the data provided by the ministry of Housing and Urban affairs close to 1,65,00 have availed this subsidy in the last three years.