Home loan subsidy

The eligibility criteria for availing the PMAY home loan subsidy (under the CLSS scheme) include being an Indian citizen, not owning a pucca house anywhere in India, and falling under specific income categories: EWS, LIG, MIG I, or MIG II. The property's carpet area, location, and the type of housing loan are also considered. For precise details, refer to the official PMAY-CLSS guidelines.

The maximum subsidy amount you can claim under the Credit Linked Subsidy Scheme (CLSS) of the Pradhan Mantri Awas Yojana (PMAY) varies based on the income category you belong to. As of my last update in September 2021, here are the maximum subsidy amounts for each income category:

Economically Weaker Sections (EWS): Up to Rs. 2.67 lakh

Low-Income Groups (LIG): Up to Rs. 2.67 lakh

Middle-Income Group (MIG I): Up to Rs. 2.35 lakh

Middle-Income Group (MIG II): Up to Rs. 2.30 lakh

Yes, you can avail of the home loan subsidy under the Credit Linked Subsidy Scheme (CLSS) of the Pradhan Mantri Awas Yojana (PMAY) if you want to purchase a newly constructed house that is for sale. The PMAY-CLSS subsidy is designed to encourage affordable housing, including the purchase of new houses, and supports various types of housing transactions, including the purchase of newly constructed properties.

While the Pradhan Mantri Awas Yojana (PMAY) aims to provide affordable housing to a wide range of beneficiaries, there are certain categories of individuals who may not be eligible to avail the benefits of the scheme.

1. Ownership of pucca house Income above eligibility criteria
2. Property location
3. Exclusion based on family members
4. Undisclosed income
5. Incomplete documentation

There is no provision under the PMAY-CLSS for providing subsidies on existing home loans at that time. The subsidy was typically applicable to new loans taken specifically for the purpose of purchasing or constructing a house.

The Credit Linked Subsidy Scheme (CLSS) under PMAY provides interest subsidies on home loans for eligible beneficiaries. It aims to make housing affordable for economically weaker sections, low-income groups, and middle-income groups by reducing the financial burden of home loan interest rates.

The Pradhan Mantri Awas Yojana (PMAY) is a flagship housing initiative launched by the Government of India in June 2015. It aims to provide affordable housing to the urban and rural poor by 2022, with an extension to December 31, 2025, for PMAY-Urban. The scheme has two components:

• PMAY-Urban (PMAY-U): Targets urban poor, including Economically Weaker Sections (EWS), Low-Income Groups (LIG), and Middle-Income Groups (MIG).
• PMAY-Gramin (PMAY-G): Focuses on providing housing in rural areas.

Under PMAY, beneficiaries can receive financial assistance to construct, purchase, or enhance a house. The scheme also offers an interest subsidy through the Credit-Linked Subsidy Scheme (CLSS) for eligible beneficiaries.

The eligibility criteria for PMAY Gramin 2025 are primarily based on the Socio-Economic and Caste Census (SECC) 2011 data, which identifies households that are houseless or living in kutcha houses with up to two rooms. These households are further verified by Gram Sabhas to confirm their eligibility.

Priority is given to households without shelter, destitute individuals, manual scavengers, members of primitive tribal groups, and legally released bonded labourers. Additionally, households with:

• No adult members aged 16 to 59
• Female-headed households with no adult male members
• Households with no literate adult above 25 years, and

Those with a disabled member and no able-bodied adult are also prioritised.

Affordable Housing in Partnership (AHP) is a component under PMAY-Urban where state governments build housing projects for the Economically Weaker Section (EWS) with financial assistance from the central government. A subsidy of Rs. 1.5 lakh per EWS house is provided by the central government. Projects must have a minimum of 250 dwelling units, and at least 35% of those must be reserved for EWS. The projects may be implemented through public agencies or in collaboration with private developers. Special preference is given to vulnerable groups such as senior citizens, persons with disabilities, SC/ST/OBC communities, single women, transgender individuals, and minority groups.

The Beneficiary-Led Construction (BLC) vertical of PMAY-Urban allows individuals from the EWS category to build a new house or enhance an existing kutcha or semi-pucca house. The central government provides financial assistance of Rs. 1.5 lakh per eligible household. Enhancements must increase the existing structure’s carpet area by at least 9 square metres, and after improvement, the total carpet area must be between 21 sqm and 30 sqm. The upgraded house must meet National Building Code (NBC) standards, ensuring that beneficiaries live in safe, durable, and habitable homes with at least one pucca room or a room with basic facilities.

Beneficiaries under PMAY 2025 are selected through a demand-driven approach based on surveys conducted by states and local bodies. The selection is based on criteria such as housing conditions and socio-economic indicators. Priority is given to:

• Houseless households, and
• Those living in 0–1 room kutcha dwellings

Special consideration is also given to:

• Households without adult members aged 16–59
• Female-headed households
• Households without literate adults above 25 years
• Families with a disabled member and no able-bodied adult, and
• Landless households dependent on manual labour

Beneficiaries are finalised through the SECC database and verified through a Gram Sabha.

As per the latest government criteria (updated August 2024), the following households are not eligible for PMAY Gramin 2025:

• Own a motorised 3/4-wheeler or mechanised agricultural equipment
• Hold a Kisan Credit Card with a limit of Rs. 50,000 or more
• Have any family member employed in government service
• Run a registered non-agricultural enterprise
• Have family members earning over Rs. 15,000/month
• Pay income tax or professional tax
• Own 2.5 acres or more of irrigated land or 5 acres or more of unirrigated land

These exclusion criteria help ensure that the scheme reaches genuinely deprived rural households.

Under the PMAY-Urban 2.0 scheme (as updated in Budget 2025), the maximum subsidy available is Rs. 1.80 lakh. This amount is offered as an interest subsidy under the Credit Linked Subsidy Scheme (CLSS) for eligible homebuyers in the EWS, LIG, and MIG categories. The actual benefit depends on the loan amount, income category, and the interest subsidy rate applicable to the applicant.

Once your PMAY CLSS application is approved, the subsidy is disbursed by central nodal agencies such as National Housing Bank (NHB), HUDCO, or SBI to your lending bank or housing finance company. The bank credits this amount directly to your loan account, reducing the outstanding principal. For instance, if your home loan balance is Rs. 20 lakh and you receive a Rs. 1.80 lakh subsidy, your new loan balance becomes Rs. 18.20 lakh. This reduces the EMI burden or shortens the repayment tenure. The process typically takes 2–4 months from approval to disbursement.

To apply for PMAY offline in 2025, eligible applicants can:

• Step 1: Visit the nearest Common Service Centre (CSC).
• Step 2: You will need to fill out the PMAY application form available at the CSC, for which a service fee of Rs. 25 plus GST is applicable.
• Step 3: Submit the completed form along with necessary documents, including Aadhaar, income proof, and property details.
• Step 4: The CSC will upload your application to the official PMAY portal.

The processing time typically ranges from 3 to 4 months. For assistance, you can also visit municipal offices or housing development boards in your area.

To download your PMAY application form, visit the official PMAY portal at pmaymis.gov.in and follow these steps:

• Step 1: Click on ‘Citizen Assessment’ on the homepage.
• Step 2: From the dropdown, select ‘Track Your Assessment Status’.
• Step 3: Choose one of two options:
  • By name, father’s name and mobile number
  • By assessment ID
• Step 4: Enter the required details and click on ‘Submit’.
• Step 5: Your application form will appear on the screen.
• Step 6: Click on ‘Print’ to download or print the form for your records.

This allows you to keep track of your submission and verify the accuracy of entered details.