The Centre’s credit-linked interest subsidy scheme, for housing loans taken by people in the mid-income groups (MIGs), has been made effective from January 1, 2017, with EMIs to go down by over Rs 2,000 per month. Prime minister Narendra Modi had on December 31, 2016, announced the credit-linked subsidy scheme (CLSS) for MIGs. Under it, an interest subsidy of 4% on housing loans of up to Rs 9 lakhs for those with an income of Rs 12 lakhs per year; and subsidy of 3% on housing loans of up to Rs 12 lakhs for those having an income of Rs 18 lakhs per year, will be given.
At an event where the ‘Operational Guidelines for CLSS (MIG)’ were released, National Housing Bank MD and CEO Sriram Kalyanaraman said that the interest subsidy of 4% under the scheme will bring down EMIs by Rs 2,062 per month on a housing loan of Rs 9 lakhs and an interest subsidy of 3% will reduce the monthly outgo by Rs 2,019 on a loan of Rs 12 lakhs, considering a normal housing loan interest rate of 8.65%.
With the scheme coming into effect from January 1, those who were sanctioned home loans and whose applications are under consideration since the beginning of the year, will be eligible for interest subsidy of up to Rs 2.35 lakh. Middle-income groups with annual incomes above Rs 6 lakhs and up to Rs 18 lakhs per year, are eligible for the interest subsidy on housing loans under the new CLSS (MIG).
Speaking on the occasion, Housing and Urban Poverty Alleviation Minister, M Venkaiah Naidu said, middle-income groups make substantial contribution to the economic growth of the country, besides paying taxes and deserved support, to fulfill the dream of owning a house. He added that the incentivisation of affordable housing, will boost the real estate sector, resulting in employment generation, as well. The minister also urged banks and other lending institutions, to adopt a proactive approach to reach the benefits to MIG people.
Minister of state for HUPA, Rao Inderjit Singh said, ‘Housing for All by 2022’ is the most important initiative of the government. The scheme is initially envisaged for one year. As many as 70 lending institutions, including 45 housing finance companies and 15 scheduled banks, signed the Memoranda of Understanding with the National Housing Bank (NHB), for implementation of the CLSS (MIG) component of the Pradhan Mantri Awas Yojana (Urban).