The Cabinet has appproved the increase in the carpet area of houses eligible for interest subsidy under the credit linked subsidy scheme for the middle income group under Pradhan Mantri Awas Yojana (PMAY). The interest subsidy has been in force since January 1, 2017 pursuant to the PM Modi’s address on December 31, 2016 announcing increased benefits for poor people availing housing loans, and a new interest subsidy scheme for housing loans for the Middle Income Group (MIG).
Five things to know about the new rules announced under Pradhan Mantri Awas Yojana (PMAY)
1) After the latest amendment is incorporated, carpet area will be increased in the middle income group (MIG-I) category of credit linked subsidy scheme (CLSS) from the existing 90 square metre to up to 120 square metre.
2) In respect of the middle income group (MIG) II category of credit linked subsidy scheme, Carpet area will be raised from the existing 110 square metre to up to 150 square metre.
3) The CLSS for MIG covers two income segments in the MIG, including Rs. 6 lakh to Rs. 12 lakh (MIG-I) and Rs. 12 lakh to Rs. 18 lakh (MIG-II) per annum.
4) In the middle income group 1 category, an interest subsidy of 4% is allowed for loan amounts up to Rs. 9 lakh while in the middle income group 2 category an interest subsidy of 3% is allowed for loan amount of Rs. 12 lakh. Housing loans above 9 lakh and 12 lakh will be at non-subsidized rates.
5) The interest subsidy will be calculated at 9% NPV over maximum loan tenure of 20 years or the actual tenure, whichever is lesser.