Credit Linked Subsidy Scheme (CLSS) under PMAY-U

What was the Credit Linked Subsidy Scheme (CLSS)?

Credit Linked Subsidy Scheme (CLSS) was one of the four verticals of Pradhan Mantri Awas Yojana - Urban (PMAY-U), launched in June 2015 by the Ministry of Housing and Urban Affairs. CLSS worked differently from the other three verticals: instead of paying a construction grant, CLSS subsidised the interest on a home loan taken from a bank or housing finance company.

According to the PMAY-Urban portal, CLSS was a Central Sector Scheme, funded entirely by the Government of India, and it was the first national housing scheme to extend a benefit to Middle Income Group families as well as the urban poor.

CLSS is closed to new applications. The MIG-I and MIG-II categories closed on 31 March 2021 and the EWS and LIG categories on 31 March 2022. If you are looking for a home loan subsidy today, the scheme that is actually open is the Interest Subsidy Scheme (ISS) vertical of PMAY-Urban 2.0, covered further down this page.

How much subsidy did CLSS give?

The subsidy was calculated as the net present value of the interest saved over a maximum tenure of 20 years, discounted at 9%. In money terms that worked out to roughly Rs 2.67 lakh for EWS and LIG borrowers and about Rs 2.30 to 2.35 lakh for the MIG slabs.

A loan larger than the subsidised amount was allowed, a borrower could take a Rs 25 lakh loan and still claim subsidy on the first Rs 6, 9 or 12 lakh, at non-subsidised interest on the balance.

How was the CLSS subsidy paid?

CLSS money never reached the borrower in cash. The Primary Lending Institution. A scheduled commercial bank, housing finance company, regional rural bank, cooperative bank, small finance bank, NBFC-MFI or state-level housing agency; filed the claim with a Central Nodal Agency. The three CNAs were the National Housing Bank, HUDCO and the State Bank of India. The subsidy came back as a lump sum and was credited upfront to the loan account, cutting the principal outstanding and, with it, the EMI for the remaining tenure.

Who was eligible for CLSS, and who was not eligible?

A family could claim CLSS if:

• The family: husband, wife and unmarried children: had annual income within the EWS, LIG, MIG-I or MIG-II slab.
• No member of the family owned a pucca house anywhere in India.
• The family had not previously taken central assistance under any housing scheme of the Government of India.
• The house being bought, built or enhanced was within the carpet area cap for the income slab, and in a statutory town covered under PMAY-U.
• The property was owned by, or co-owned with, an adult woman of the family, for EWS and LIG beneficiaries buying a house. This condition did not apply to new construction or enhancement on land already owned.
• Aadhaar of every family member was provided.

A family was not eligible if:

• Any member already owned a pucca house in any part of India, even in another state or in a village.
• The family had already drawn central housing assistance — CLSS was a once-in-a-lifetime benefit per family.
• Income exceeded Rs 18 lakh a year, the MIG-II ceiling.
• The loan was for a purpose other than acquisition, construction or enhancement of a house, or the property lay outside the towns notified under the mission.

Anyone applying today cannot apply for CLSS at all, whatever their income, the vertical is closed. Beware of agents who claim to still process CLSS applications for a fee.

How to apply for the successor scheme (Interest Subsidy Scheme under PMAY-U 2.0)

CLSS itself takes no new applications. The route that is open is the Interest Subsidy Scheme vertical of PMAY-U 2.0, approved by the Union Cabinet in August 2024 for a five-year period from 2024 to 2029.

1. Check your eligibility. Under ISS, according to the PMAY-U 2.0 FAQ, the household's annual income must be up to Rs 9 lakh, no family member may own a pucca house anywhere in India, and the family must not have taken central housing assistance before.
2. Go to the official portal at pmaymis.gov.in and open the PMAY-U 2.0 section. You can also apply through a Common Service Centre or your Urban Local Body office.
3. Complete Aadhaar-based eKYC for yourself and add the Aadhaar details of your spouse and unmarried children.
4. Fill the application with your income details, address, bank account details and the details of the house you plan to buy or build.
5. Submit the application and save the application or reference number shown on screen.
6. Approach a Primary Lending Institution, a bank or housing finance company, for the home loan, quoting your PMAY-U 2.0 application. The lender files the subsidy claim on your behalf.
7. Track your status on pmaymis.gov.in using the application number, and with the lending branch for the claim itself.

Under ISS the central assistance is up to Rs 1.80 lakh, released in five yearly instalments, for a house with carpet area up to 120 sqm.

What documents were required for CLSS?

How CLSS fitted into PMAY-Urban

PMAY-Urban 1.0 ran four verticals: In-Situ Slum Redevelopment (ISSR), Credit Linked Subsidy Scheme (CLSS), Affordable Housing in Partnership (AHP) and Beneficiary Led Construction (BLC). CLSS was the only demand-side vertical. The only one that worked through the banking system rather than through a state government construction programme.

PMAY-Urban as a whole has sanctioned about 172.72 lakh houses, with roughly 99.25 lakh completed and central assistance of about Rs 1.81 lakh crore released, according to the mission dashboard. CLSS accounted for interest subsidy disbursed to more than 25 lakh borrowers before it closed.

PMAY-U 2.0, which replaced the 1.0 verticals, runs Beneficiary Led Construction, Affordable Housing in Partnership, Affordable Rental Housing and the Interest Subsidy Scheme. ISSR was not carried forward as a separate vertical.

Where to get help

• PMAY-U helpline: 011-23060484, 011-23063620
• Email: pmayumis-support@gov.in
• Portals: pmay-urban.gov.in for scheme information, pmaymis.gov.in for applications and beneficiary search
• Your lending bank branch for anything to do with a claim already filed
• Urban Local Body / municipality office for local verification and grievances

Applying under PMAY-U is free. No agent, builder or broker can charge you a fee to "get your subsidy sanctioned", and no official will ask you for an OTP.