Credit-linked housing subsidy scheme for middle income group extended to March 31, 2021

Ever since its implementation in 2017, the CLSS scheme has already benefitted over 3.3 lakh families and the extension will further aid many more families to avail housing under this scheme.

Atmanirbhar Bharat Package: Relief for street vendors, tribals and lower middle class
The government on Thursday announced the extension of the deadline for the affordable housing Credit Linked Subsidy Scheme (CLSS) till March 2021. The deadline for CLSS had expired on March 31, 2020. According to the government, this move will benefit 2.5 lakh middle income families during 2020-21. This announcement was part of the second trance of the government's economic relief package.

Credit Linked Subsidy Scheme for Middle Income Group was 'operationalized' from May 2017. During her press conference, the finance minister, Nirmala Sitharaman, said,"Scheme has benefited 3.3 lakh middle class families so far. By extending the deadline, it will lead to investment of over Rs 70,000 crores in housing and will create jobs. "



Anuj Puri, Chairman – ANAROCK Property Consultants said that ever since its implementation in 2017, the CLSS scheme has already benefitted over 3.3 lakh families and the extension will further aid many more families to avail housing under this scheme. As a ripple effect of increased demand for affordable housing, it will positively push demand for raw materials like cement, steel, transport and other construction materials. "The government’s push for affordable housing has been unmistakeable in the last six years. Its Housing for All by 2022 project has already resulted in multiple sops and incentives."

Puri further said, "As a consequence, there has been a significant increase in activity in affordable segment over the last few years. As per ANAROCK research, there are currently 15.62 lakh under construction units across the top 7 cities, of which nearly 39% are in the affordable segment priced Rs 40 lakh budget."

What is CLSS scheme?
With the help of the CLSS, the Government aims at increasing the credit flow in institutions to meet the housing needs of the urban poor population in our country.

Under the Middle Income Group (MIG), there are two sets of home buyer beneficiaries. The first set is MIG-I, which covers those homebuyer with an annual income of Rs 6 lakh to Rs 12 lakh per annum and the second one is MIG II, which covers home buyer who fall in the income group of Rs 12 lakh to Rs 18 lakh per annum.

Adhil Shetty, CEO, BankBazaar.com says, "To extend the deadline to avail CLSS benefits by eligible MIG-1 and MIG-2 families is a welcome move. This will encourage middle-class families in realising their home-buying dreams despite the prevailing economic challenges. Under this scheme, eligible families with annual household income between Rs. 6 lakh to Rs. 18 lakh per annum will now get another year to benefit from an upfront interest subsidy of up to Rs. 2.35 lakh on their approved home loans. This can also trigger a spur in the demand for affordable houses, which, in turn, will relieve the stress experienced by countless developers struggling with mounting inventories since 2019 to some extent."

Particulars MIG-I MIG-II
Annual income Rs 6 lakh to Rs 12 lakh Rs 12 lakh to Rs 18 lakh
Maximum loan tenure 20 years 20 years
Housing loan amount eligible for interest subsidy Up to Rs 9 lakh Up to Rs 12 lakh
Revised carpet area 160 square metres 200 square metres
Interest subsidy 4% 3%

In June 2018, in a major decision to boost Affordable housing, the Ministry of Housing & Urban Affairs, had approved the revision of the carpet area of houses eligible for interest subsidy under the Credit Linked Subsidy Scheme (CLSS) for the Middle-Income Group (MIG) under Pradhan Mantri Awas Yojana (Urban) in respect of MIG I from “up to 120 square metre” to be increased to “up to 160 square metre” and, in respect of MIG II from “up to 150 square metre” to “up to 200 square metre”

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Earlier, the government had introduced CLSS in June 2015 for home loans to home buyers from the economically weaker section (EWS), Low Income Group (LIG), and was extended to the MIG since January 2017.
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