2 min
05 September 2025

A home loan subsidy is a government initiative designed to make homeownership more affordable by reducing the interest burden on housing loans. In India, the Pradhan Mantri Awas Yojana (PMAY), launched in 2015, offers such benefits through the Credit-Linked Subsidy Scheme (CLSS). This scheme provides interest subsidies to eligible beneficiaries across various income groups, including the Economically Weaker Sections (EWS), Low-Income Groups (LIG), and Middle-Income Groups (MIG I and II).

For instance, EWS and LIG beneficiaries can avail an interest subsidy of 6.5% on loans up to Rs. 6 lakh, while MIG I and II beneficiaries are eligible for subsidies of 4% and 3% on loans up to Rs. 9 lakh and Rs. 12 lakh, respectively. The maximum subsidy amount can go up to Rs. 1.80 lakh (previously 2.67 lakh under PMAY 1.0), significantly reducing the overall loan burden.

In this blog, we will elaborate on the details of the PMAY home loan subsidy, its eligibility criteria, benefits, and the application process to help you make informed decisions about availing this financial assistance.

Rs. 1.80 lakh home loan subsidy announced under PMAY 2.0 in Union Budget 2025

Prior to the Union Budget 2025 announcement, there was anticipation around the potential reinstatement of the Rs. 2.67 lakh home loan subsidy under the Pradhan Mantri Awas Yojana (PMAY). This subsidy, previously offered through the Credit-Linked Subsidy Scheme (CLSS), aimed to make homeownership more accessible for various income groups by reducing the interest burden on housing loans.

Under the earlier CLSS framework, eligible beneficiaries received interest subsidies based on their income categories:

  • Economically Weaker Sections (EWS) and Low-Income Groups (LIG): An interest subsidy of 6.5% on loan amounts up to Rs. 6 lakh, with a maximum carpet area of 60 square metres.
  • Middle-Income Group I (MIG-I): An interest subsidy of 4% on loan amounts up to Rs. 9 lakh, for homes with a carpet area up to 160 square metres.
  • Middle-Income Group II (MIG-II): An interest subsidy of 3% on loan amounts up to Rs. 12 lakh, applicable to homes with a carpet area up to 200 square metres.

The CLSS was discontinued for MIG categories in March 2021 and for EWS/LIG in March 2022.

However, in a significant boost to the affordable housing sector, the Union Budget 2025 has reintroduced the Credit-Linked Subsidy Scheme (CLSS) under the revamped Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY 2.0). The updated scheme now offers a home loan interest subsidy of up to Rs. 1.80 lakh for eligible beneficiaries, aimed at making homeownership more affordable for low- and middle-income households.

The scheme is targeted at individuals from the Economically Weaker Sections (EWS), Low-Income Groups (LIG), and select Middle-Income Groups (MIG). This subsidy will be provided as an interest discount on eligible home loans, directly credited to the borrower’s loan account, effectively reducing the outstanding principal and monthly EMIs.

Here are the key features of PMAY 2.0 – CLSS (Budget 2025 update):

  • Maximum interest subsidy: Rs. 1.80 lakh
  • Target beneficiaries: EWS, LIG, and select MIG applicants
  • Objective: Promote homeownership and address urban housing shortages
  • Applicable loans: Loans availed for purchasing, constructing, or enhancing homes in urban areas

This announcement forms part of the government's larger vision to provide one crore urban homes over five years, with a renewed focus on affordability, sustainability, and ease of financing. By reducing the financial burden on first-time homebuyers, the updated CLSS is expected to increase housing demand and support the real estate sector's recovery.

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What is a home loan subsidy?

Borrowers who avail of a home loan from lenders under the Pradhan Mantri Awas Yojana (PMAY) scheme can enjoy significant benefits, including an interest subsidy of up to Rs. 1.80 lakh. This subsidy is part of the home loan subsidy offered to make housing more affordable for economically weaker sections (EWS) and lower-income groups (LIG). The maximum subsidy of Rs. 1.80 lakh can be availed under the revised EWS/LIG scheme, where borrowers benefit from a reduced interest rate of 6.5% over a tenure of 20 years. This scheme lowers the overall interest burden, making home ownership more accessible and affordable for first-time buyers.

What is the Pradhan Mantri Awas Yojana -Urban 2.0 (PMAY-U 2.0)

The Government of India, through the Ministry of Housing and Urban Affairs (MoHUA), has been working towards its long-standing vision of “Housing for All” since 2015 under the Pradhan Mantri Awas Yojana – Urban (PMAY-U). As cities continue to expand rapidly, the need for affordable homes for low- and middle-income families has grown significantly. To meet this demand, the government has introduced Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY-U 2.0), which came into effect on 1st September 2024.

This renewed phase of the scheme has set an ambitious target of addressing the housing requirements of one crore urban families from economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG) over the next five years. Families that do not own a pucca (permanent) house anywhere in the country will be eligible for benefits. Assistance will be offered for building, purchasing, or renting affordable homes in urban areas, in partnership with States, Union Territories, and Primary Lending Institutions (PLIs).

Financial support under the scheme is significant, with Central assistance of up to Rs. 2.50 lakh crore earmarked. PMAY-U 2.0 will operate through four major components: Beneficiary-Led Construction, Affordable Housing in Partnership, Affordable Rental Housing, and an Interest Subsidy Scheme. The Interest Subsidy Scheme helps reduce the overall cost of home loans, making them more accessible for eligible applicants.

After the earlier PMAY-CLSS programme successfully supported lakhs of families between 2015 and 2022, the government has now partnered with institutions such as HDFC Bank and the National Housing Bank to deliver PMAY-U 2.0 effectively. The scheme is a key step towards ensuring that first-time homebuyers in urban India can fulfil their dream of owning a safe, all-weather pucca house.

PMAY 2025: Who can apply and how to avail home loan subsidy online

The Pradhan Mantri Awas Yojana (PMAY) is a government-backed housing scheme launched in 2015 to help first-time homebuyers, especially from low and middle-income families, afford their dream homes. By offering an interest subsidy of up to 6.5% on home loans for a period of up to 20 years, this scheme aims to reduce the financial burden on those building or buying a house for the first time.

PMAY is available to both rural and urban households, and is targeted at different income groups. The scheme is especially useful for families that may not otherwise be able to afford rising housing costs. In addition to reduced interest rates, the scheme provides access to affordable housing options across India.

The government has made it easy for eligible citizens to apply online for PMAY benefits. Here's a clear guide to help you understand who qualifies and how to apply through the official PMAY portal.

Categories eligible under PMAY

Before applying, it's important to know which income group you fall under, as PMAY eligibility is based on annual household income:

  • Economically Weaker Section (EWS): Family income of up to Rs. 3 lakh per year.
  • Low Income Group (LIG): Annual household income between Rs. 3 lakh and Rs. 6 lakh.
  • Middle Income Group I (MIG I): Household income from Rs. 6 lakh to Rs. 12 lakh per year.
  • Middle Income Group II (MIG II): Income above Rs. 12 lakh and up to Rs. 18 lakh annually.

Understanding which income category you fall under is the first step towards securing affordable housing finance. Once you know your eligibility for PMAY, partnering with a reliable lender like Bajaj Finserv ensures you get the best combination of government benefits and competitive market rates. Check your loan offers from Bajaj Finserv now. You may already be eligible, find out by entering your mobile number and OTP.

Step-by-step guide to apply online

  • Visit the official government website: PMAY-HFA (Urban).
  • Choose the ‘Citizen Assessment’ option from the menu.
  • Select the appropriate applicant category based on your income group.
  • Enter your Aadhaar number to proceed.
  • Fill out the application form with your personal details, income details, address, bank account information, and property-related documents.
  • Type in the captcha code, double-check the details, and submit the form.

Once submitted, you can track your application anytime by selecting the ‘Track Your Assessment Status’ link under the same menu.

Documents needed for PMAY application

To complete your application, you’ll need the following:

  • Identity proof
  • Address proof
  • Income documents
  • Bank account details
  • Property-related papers

By following these steps, eligible individuals can access government support for buying or building a home through a simple and transparent online process.

Home loan subsidy offered under Pradhan Mantri Awas Yojana

The Pradhan Mantri Awas Yojana (PMAY) introduced by the Government of India, aims to provide housing for all by March 2022 but then extended till December 2024. The Credit Linked Subsidy Scheme is a significant part of PMAY, which offers a home loan interest subsidy to borrowers. The other three components of PMAY are In-Situ Slum Redevelopment, Beneficiary-Led Construction, and Affordable Housing in Partnership.

The Credit Linked Subsidy Scheme (CLSS) extends financial assistance to eligible individuals via various financial organisations in India. With this program, the government promotes the increase of credit flow in financial institutions towards housing requirements. The National Housing Board and the Housing and Urban Development Corporation are the central nodal agencies who have received the authorisation to take this project forward.

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Pradhan Mantri Awas Yojana - Credit Linked Subsidy Scheme (PMAY-CLSS) details

Here are the details of the Pradhan Mantri Awas Yojana - Credit Linked Subsidy Scheme (PMAY-CLSS):

Aspect Details
Scheme name Pradhan Mantri Awas Yojana - Credit Linked Subsidy Scheme (PMAY-CLSS)
Objective To provide affordable housing to economically weaker sections, low-income groups, and mid-income groups
Target beneficiaries Economically Weaker Sections (EWS), Low-Income Groups (LIG), and Middle-Income Groups (MIG)
Eligibility criteria Income criteria vary based on EWS, LIG, and MIG categories
Types of houses New construction or extension of existing houses
Subsidy components Interest subsidy on home loan interest rates
Interest subsidy categories EWS and LIG: Up to 6.5% interest subsidy on a maximum loan amount of Rs. 6 lakh
MIG I: Up to 4% interest subsidy on a maximum loan amount of Rs. 9 lakh
MIG II: Up to 3% interest subsidy on a maximum loan amount of Rs. 12 lakh
Maximum loan tenure 20 years
Carpet area EWS: Up to 30 square meters
LIG: Up to 60 square meters
MIG I: Up to 160 square meters
MIG II: Up to 200 square meters
Application process Apply through eligible banks, housing finance companies, or financial institutions
Validity of scheme Till March 2022
Benefits Reduction in monthly home loan EMIs, making homeownership more affordable
Online application portal CLSS Awas Portal (https://pmayuclap.gov.in)

Who is eligible for the Pradhan Mantri home loan subsidy?

The interest subsidy on home loan by the government of India is available for 3 income groups: EWS, LIG, and MIG. Read on to know more about the eligibility criteria for the EWS or Economically Weaker Section. The annual income of the household – up to Rs. 3 lakh

  • Home loan amount on which subsidy is calculated – up to Rs. 6 lakh
  • Rate of interest subsidy – 6.50%
  • The house’s carpet area – up to 60 square metres

Eligibility criteria for the lower income group

For applicants falling under the LIG or Lower Income Group

  • Yearly income of the household – from Rs. 3 lakh up to Rs. 6 lakh
  • Home loan amount on which subsidy is calculated – up to Rs. 6 lakh
  • Rate of interest subsidy – 6.50%.
  • The house’s carpet area – up to 60 square metres

Applicants from the EWS and LIG categories can avail of a maximum home loan subsidy of up to Rs. 1.80 lakh (under PMAY-U 2.0).

Eligibility criteria for the medium income group I

For those falling under the Medium Income Group or MIG I

  • The annual income of the household – from Rs. 6 lakh up to Rs. 12 lakh
  • Home loan amount on which subsidy is calculated – up to Rs. 9 lakh
  • Rate of interest subsidy – 4%
  • The house’s carpet area – up to 160 square metres

Eligibility criteria for the medium income group II

For those falling under the Medium Income Group or MIG II

  • Yearly income of the household – from Rs. 12 lakh up to Rs. 18 lakh
  • Home loan amount on which subsidy is calculated – up to Rs. 12 lakh
  • Rate of interest subsidy – 3%
  • The house’s carpet area – up to 200 square metres

Eligible candidates from MIG I & MIG II categories can avail a maximum subsidy on home loan interest of up to Rs. 2.35 lakh.

Note: The carpet area is the actual area within the walls where you can lay a carpet. It is excluding the inner wall’s thickness and common spaces like stairs or lobby.

Other eligibility criteria for PMAY subsidy

Apart from the annual income, applicants must fulfil the following requirements:

  • For EWS/ LIG groups, a female member must own or co-own the house (with terms and conditions applied).
  • No member of the household should own a pucca house anywhere in this country. The new property must be their first house
  • The beneficiary family must not have availed any government-backed housing scheme before
  • The family availing the CLSS benefits must comprise the husband and wife along with their unmarried children (son/ daughter)
  • In the case of married applicants, either or both the spouses can qualify to avail the subsidy on a home loan on a single property
  • An adult earning member of a family is considered as an independent beneficiary of this home loan interest subsidy
  • A subsidy on home loan interest rate is applicable on funds utilised for the purchase, construction, or renovation of a residential property. However, MIG I and MIG II applicants can use the loan amount only to purchase a house
  • Under this PMAY CLSS scheme, the maximum tenor of a home loan must be 20 years

When approving applications for the CLSS benefit, the government further prioritises women, transgender individuals, minorities, and widows to encourage homeownership.

How to apply for the home loan subsidy?

Eligible applicants can directly apply for a home loan under CLSS with PLIs or Prime Lending Institutions. PLIs are the financial institutions including NBFCs, cooperative banks, regional rural banks, and others who have partnered with the central nodal agencies to offer subsidised rates on housing loans. Close to 70 financing organisations have collaborated with NHB and HUDCO. Here are the steps to follow.

  • Get in touch
    Contact us and ensure that you meet the eligibility criteria for CLSS benefits.
  • Apply
    You will receive a loan subsidy application form. Fill it with accurate details.
  • Submit documents
    Submit the application form along with all the documents required. Make sure to submit updated papers.
  • Get the loan
    The loan amount is then disbursed to your account after the verification of documents and property.
  • Reimbursement of subsidy
    Bajaj Finserv will approach the nodal agencies to process your application and reimburse the subsided funds in your loan account.

Note: No lending institution can charge any additional fees to sanction a home loan under CLSS.

Disclaimer:

The validity of the PMAY scheme has not been extended.

  • The EWS/ LIG schemes have been discontinued w.e.f. March 31, 2022
  • The MIG schemes (MIG I and MIG II) have been discontinued w.e.f. March 31, 2021

How to transfer the PMAY subsidy to the borrower’s bank?

Under the Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY-U 2.0), eligible applicants can receive an interest subsidy of up to Rs. 1.80 lakh through the Credit-Linked Subsidy Scheme (CLSS). However, this benefit is not directly claimed by the borrower—it is facilitated through the bank or housing finance company that issues the home loan.

Here’s how the PMAY subsidy is transferred to the borrower’s loan account:

  • Loan sanction and application: Once your home loan is approved by a participating financial institution, the bank identifies if you are eligible for the PMAY subsidy based on your income group, property details, and first-home ownership status.
  • Subsidy claim by bank: Your bank submits a formal subsidy claim on your behalf to the National Housing Bank (NHB) or HUDCO, which are the designated central nodal agencies for PMAY.
  • Eligibility verification: The NHB checks your application to ensure that you have not made multiple subsidy claims under PMAY and that you meet all eligibility criteria.
  • Subsidy disbursement to bank: Once your claim is verified, NHB releases the subsidy amount to your lender.
  • Credit to loan account: The bank then credits the entire subsidy amount directly to your home loan account, thereby reducing the outstanding principal. This results in a lower EMI or shorter loan tenure, depending on your agreement with the bank.

This process is automated and typically takes 2–4 months after loan disbursement. Borrowers should regularly follow up with their bank to track the status of the subsidy claim.

How to check PMAY application status?

To check the status of your Pradhan Mantri Awas Yojana (PMAY) application, you can use the official PMAY portal. The portal facilitates the processing of applications, along with tracking of subsidy status by beneficiaries.

Here are the steps to check PMAY application status:

  • Step 1: Visit the official PMAY portal (https://pmaymis.gov.in).
  • Step 2: Navigate to the 'Track Your Assessment Status' section on the homepage.
  • Step 3: You can check your application status using either:
    • By name, father’s name and mobile number, and enter your details as required.
    • By entering your unique assessment ID provided during the application.
  • Step 4: Fill in the necessary information based on your chosen option.
  • Step 5: After entering the details, click on the 'Submit' button. Your application status will be displayed on the screen.

By following these steps, you can easily track the progress of your PMAY application and stay informed about its current status.

How to edit your details after submitting application for PMAY

If you have submitted your application for the Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY-U 2.0) and need to correct any details, the official PMAY portal provides a facility to edit your application. This feature is particularly useful if you have made errors in your personal information or contact details.

Steps to edit your PMAY application details:

  • Visit the official PMAY portal: Navigate to https://pmaymis.gov.in.
  • Access the 'Citizen Assessment' section: On the homepage, click on the 'Citizen Assessment' tab.
  • Select the appropriate category: Choose the category under which you initially applied, such as 'For Slum Dwellers' or 'Benefits under other 3 components'.
  • Enter your Aadhaar details: Input your Aadhaar number and click on 'Check' to verify your identity.
  • Retrieve your application: Upon successful verification, your application details will be displayed.
  • Click on the 'Edit' option: Locate and click the 'Edit' button to modify your application.
  • Update necessary information: Make the required changes to your application form.
  • Submit the updated application: After making the necessary edits, enter the captcha code and click on the 'Save' button to submit your updated application.

By following these steps, you can successfully update your PMAY application details to ensure accurate processing of your housing subsidy benefits.

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What are the benefits of CLSS?

  • Borrowers receive the subsidised amount from the government directly in their loan account. This brings down their outstanding principal amount, thus reducing their subsequent EMIs
  • As EMIs become more manageable, it’s easier to repay the housing loan. However, if borrowers choose to continue paying the original EMI amount, the loan tenor shortens. As a borrower, you can select a suitable option as per your requirements
  • Applicants claiming this interest subsidy can also avail tax benefits on the home loan. According to the IT Act 1961, tax exemptions of up to Rs. 2 lakh on the payable interest and up to Rs. 1.5 lakh on the principal repayment may be claimed in one fiscal year

Here’s an example:
Say you avail a loan of Rs. 32 lakh with a repayment tenor of 20 years, and you come under the MIG II category. Usually, the EMIs per month come to around Rs. 31,000. Now, the loan amount eligible for the interest subsidy is Rs. 12 lakh. If you calculate your EMIs with a 3% rate of subsidy based on the Excel PMT formula, the EMIs reduce to around Rs. 7,000 per month.

Documents required to apply for Pradhan Mantri Awas Yojana 2025

To benefit from the Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY-U 2.0), an Interest Subsidy Scheme (ISS), eligible applicants must submit a complete set of documents while applying through an authorised bank or housing finance institution. These documents serve to verify identity, income, ownership status, and eligibility for the Credit-Linked Subsidy Scheme (CLSS). Whether you are applying as part of the Economically Weaker Section (EWS), Low-Income Group (LIG), or Middle-Income Group (MIG), the documentation process is a critical step.

Below is the updated and complete list of documents required to apply for PMAY 2025, based on the latest scheme guidelines:

General documents (Applicable to all applicants)

  • Completed loan application form (with reference number generated on the PMAY-U 2.0 portal)
  • Three passport-size photographs
  • Proof of identity: Aadhaar Card or PAN Card
  • Proof of address (any one): Recent telephone/electricity/water/piped gas bill, passport, driving licence, or Aadhaar Card
  • Employer identity card
  • Self-undertaking under the Interest Subsidy Scheme (ISS)

Property-related documents

  • Registered Sale deed or stamped Agreement to sale with title link documents
  • Occupancy certificate
  • Share certificate (for properties in Maharashtra)
  • Approved plan copy (xerox of blueprint), Conveyance deed, and Development agreement (if applicable)
  • Latest property tax receipt, maintenance bill, and electricity bill

Income documents

  • For salaried individuals:
    • Salary slips/certificates for the last 3 months
    • Form 16 or IT returns for the last two financial years (with IT Department acknowledgement)
    • Last 6 months’ bank statements
  • For Self-Employed/Non-Salaried Individuals:
    • Business address proof
    • IT returns for the last three financial years
    • Balance sheet and Profit & Loss account (last 3 years)
    • Business license details or equivalent registration
    • TDS certificate (Form 16A, if applicable)

Ensuring all documents are accurate and up-to-date will streamline your application and increase your chances of availing the PMAY 2025 home loan subsidy.

Why approach Bajaj Finserv for a home loan with interest subsidy?

Bajaj Finserv offers one of the most competitive housing finance solutions customised to meet your property buying or construction needs. Get an interest subsidy on your first home loan and save up to Rs. 2.67 lakh by applying for a loan with us and enjoy a competitive interest rate too. As an earning member of the family, get this affordable housing loan to own a property in your name. 

Bajaj Finserv offers high-value financing for both salaried and self-employed individuals. Salaried applicants can apply for a loan starting from Rs. 10 lakh. Meet the following eligibility criteria for faster approval on your home loan.

  • Nationality

    Nationality

    Indian

  • Age

    Age

    23 years to 67 years for salaried individuals, 23 years to 70 years for self-employed

  • Employment

    Employment status

    At least 3 years of experience for salaried individuals, at least 5 years of business continuity for self-employed individuals.

  • CIBIL score

    CIBIL score

    725 or higher

Check the complete eligibility criteria for home loan to see the minimum salary requirements as per your state of residence.

Benefits of Bajaj Finserv Home Loan

Once you qualify, apply for this home loan and avail exclusive benefits such as the following.

  • No part-prepayment and foreclosure charges
  • Value-added services such as property search and a property dossier
  • Online account management facility 24X7
  • Online Home Loan
  • Minimal documentation
  • Digital Sanction Letter in minutes 
  • Flexible tenor
  • Flexi Hybrid feature that reduces your EMIs almost by half in the initial tenor

Further, you get the benefit of an easy home loan balance transfer facility to switch your home from your existing lender to us to enjoy lower interest rates. In this case, you can also get an ample top-up loan. This refers to an additional credit that you can avail to address home-related or any other expenses at a nominal rate of interest.

Note: If you have already received an interest subsidy on existing home loan, you cannot claim another subsidy when availing the balance transfer facility for better rates.

Compute your monthly instalments beforehand

Bajaj Finserv offers one of the most affordable home loan interest rates along with nominal associated charges and no hidden fees. You can check your monthly outflows towards the loan repayment using our Home Loan EMI Calculator.

It is an online calculator that computes your loan EMIs, total payment including principal and interest and total payable interest instantly. Simply provide the basic details – loan amount, your preferred tenor and the rate of interest. It functions on the mathematical formula EMI = [P x R x (1+R)^N]/[(1+R)^N-1].

This online EMI calculator helps you plan your repayment strategically and manage your finances better. You can also use it to evaluate if the preferred loan amount is feasible for you, considering your financial capabilities.

So, apply for a home loan from Bajaj Finserv today for the best features and benefits and get your first house effortlessly. You might already be eligible – check your offers now by entering your mobile phone number and OTP.

Conclusion

The home loan subsidy offered under PMAY 2.0 is a transformative step towards making homeownership more accessible and affordable for millions of Indians. With subsidies of up to Rs. 1.80 lakh, simplified eligibility, and a user-friendly digital process, the scheme empowers families from the EWS, LIG, and MIG categories to realise their dream of owning a home. As part of the government’s vision for inclusive urban development, PMAY 2.0 not only reduces the financial burden on borrowers but also supports long-term economic growth. If you are planning to buy your first home, this is the ideal time to explore the PMAY benefits.

Taking advantage of PMAY subsidies while securing a home loan from a trusted financial institution like Bajaj Finserv puts you on the fastest path to homeownership. With interest rates starting at 87.45%* p.a and loan amounts up to Rs. 15 Crore*, you can turn your homeownership dreams into reality. Check your loan offers from Bajaj Finserv now. You may already be eligible, find out by entering your mobile number and OTP.

Helpful links for understanding home loan process

What is Home Loan

Joint Home Loan

Home Loan Processing Fees

Home Loan Tax Benefits

Home Loan Tenure

Housing Loan Top Up

Rural Home Loans

Home Loan Process

Down Payment for Home Loan


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Frequently asked questions

What is a housing loan subsidy?

A housing loan subsidy is a financial assistance program provided by the government to make housing more affordable for specific segments of the population. It aims to reduce the burden of housing loan repayments for eligible individuals and families, particularly those belonging to economically weaker sections and low- to middle-income groups. This subsidy is often offered as a part of government housing schemes to encourage home ownership and address the housing needs of underserved communities.

What is the Rs. 2.67 lakh subsidy on a home loan?

The Rs. 2.67 lakh subsidy on a home loan is likely a reference to the maximum subsidy amount provided under the Credit-Linked Subsidy Scheme (CLSS) component of the Pradhan Mantri Awas Yojana (PMAY) in India.

Who can get the Rs. 2.67 lakh subsidy on a home loan?

The Rs. 2.67 lakh subsidy on a home loan is associated with the Credit-Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) in India. This subsidy is primarily targeted at individuals falling under the Economically Weaker Sections (EWS) and Lower-Income Groups (LIG).

Who is eligible for a 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.

What is the maximum subsidy I can claim under CLSS?

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

Can I avail of the home loan subsidy if I want to purchase a newly constructed house that is for sale?

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.

Who is not eligible for PMAY?

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

Can I get a subsidy on an existing home loan?

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.

What is the Credit Linked Subsidy Scheme (CLSS)?

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.

What is the Pradhan Mantri Awas Yojana?

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.

Who are eligible for PMAY Gramin 2025?

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.

What is affordable housing in partnership (AHP)?

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.

What is beneficiary-led individual house construction/enhancements (BLC)?

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.

How are beneficiaries chosen for Pradhan Mantri Awas Yojana 2025?

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.

Who are not eligible for housing units under PMAY Grahmin 2025?

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.

What is the maximum subsidy you can get under PMAY?

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.

How does PMAY subsidy reach beneficiary?

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.

How to apply for PMAY offline in 2025?

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.

How to download PMAY application form?

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.

What is PMAY-U 2.0?

Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY-U 2.0) is the government’s flagship housing scheme designed to make affordable housing accessible for urban families. It provides Central assistance through Primary Lending Institutions (PLIs) so that eligible households can construct, buy, or even rent homes at lower costs. The scheme supports new construction as well as purchase of resale properties, with the ultimate goal of fulfilling the vision of “Housing for All” in India.

When exploring PMAY-U 2.0 benefits for your home purchase, selecting an established housing finance partner ensures you receive both government subsidies and competitive loan terms. Bajaj Finserv specialises in processing PMAY applications efficiently while offering attractive interest rates starting at 7.45%* p.a Check your home loan eligibility with Bajaj Finserv today. You may already be eligible, find out by entering your mobile number and OTP.

What would be the implementation period of PMAY-U 2.0?

The scheme is scheduled to run for five years, beginning on 1st September 2024 and continuing until 2029. During this time, the programme aims to extend its benefits to one crore families across urban areas. The long duration ensures that sufficient time is provided for States, Union Territories, and lending institutions to identify eligible beneficiaries, sanction assistance, and complete the housing projects effectively.

What are the eligibility criteria for seeking benefit under the scheme?

Eligibility under PMAY-U 2.0 is restricted to families living in urban areas who do not own a permanent (pucca) house anywhere in the country. Applicants must fall within the Economically Weaker Section (EWS), Low-Income Group (LIG), or Middle-Income Group (MIG) categories. The benefits can be availed for constructing, purchasing, or even renting an affordable house. The scheme ensures that support reaches only those who genuinely need housing assistance.

What is the definition of beneficiary family under the scheme?

For the purpose of PMAY-U 2.0, a beneficiary family is defined as a household unit consisting of a husband, wife, and their unmarried children. The definition ensures clarity when deciding eligibility, as the entire family is considered a single unit. If any member of the family already owns a pucca house anywhere in India, the household will not qualify for benefits under the scheme.

What is the definition of EWS, LIG and MIG for the purpose of the scheme?

Under PMAY-U 2.0, families are categorised based on annual household income. Economically Weaker Section (EWS) includes those earning up to Rs. 3 lakh per year. Low-Income Group (LIG) covers families with incomes above Rs. 3 lakh but not exceeding Rs. 6 lakh. Middle-Income Group (MIG) applies to households earning between Rs. 6 lakh and Rs. 9 lakh annually. These categories ensure targeted support for families most in need of affordable housing.

Regardless of which income category you belong to, combining PMAY benefits with a competitive home loan can significantly reduce your overall borrowing costs. Bajaj Finserv offers customised loan solutions for all income groups, with flexible repayment options and minimal documentation requirements. Check your loan offers from Bajaj Finserv now. You may already be eligible, find out by entering your mobile number and OTP.

What is the coverage of PMAY-U 2.0?

The coverage of PMAY-U 2.0 is extensive, spanning all statutory towns listed in Census 2011 as well as towns that have been notified since then. It also includes areas under planning and development authorities such as Industrial Development Authorities, Urban Development Authorities, and Special Area Development Authorities. By covering these regions, the scheme ensures that urban residents across diverse jurisdictions can access affordable housing opportunities.

Will the newly notified towns be included in PMAY-U 2.0?

Yes, any town that is officially notified during the five-year implementation of PMAY-U 2.0 will also come under its coverage. Such inclusions are made based on gazette notifications issued by State or Union Territory governments, with the approval of the Ministry of Housing and Urban Affairs (MoHUA). This flexibility ensures that the scheme remains relevant as urban areas continue to expand and new towns are formally recognised.

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