Here are key things to know about Govt's credit linked interest subsidy scheme on housing loans

The government on Wednesday released operational guidelines on Credit Linked Subsidy Scheme (CLSS) under Pradhan Mantri Awas Yojana (Urban) for middle-income groups which will bring down equated monthly installments (EMIs) on housing loans for buyers in urban areas. 

Prime minister Narendra Modi had announced the Credit Linked Subsidy Scheme (CLSS) for Middle Income Group (MIG) on December 31 last year, PTI reported.

The scheme has been effective from January 1 this year and it set to lower EMIs on housing loans by over Rs 2,000 per month. 

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"EMIs for Middle Income Group beneficiaries under the scheme will lower the repayment burden by over Rs 2,000 per month," PTI reported quoting National Housing Bank managing director and chief executive officer Sriram Kalyanaraman, as saying. 

Here are key things to know about the government's Credit Linked Subsidy Scheme (CLSS) for Middle Income Group (MIG) in urban areas: 

1. Under the scheme, the government will give an interest subsidy of 4% on housing loans of up to Rs 9 lakh for those with an income of Rs 12 lakh per year

2.  Similarly, there is an interest subsidy of 3% on housing loans of up to Rs 12 lakh for those having an income of Rs 18 lakh per year 

3. The interest subsidy of 4% under the scheme will bring down EMI by Rs 2,062 per month on a housing loan of Rs 9 lakh

4. The interest subsidy of 3% will reduce the monthly outgo by Rs 2,019 on Rs 12 lakh loan, considering normal housing loan interest rate of 8.65% 

5. With the CLSS scheme coming into effect from January 1 this year, those who were sanctioned home loans and whose applications are under consideration since beginning of the year will be eligible for interest subsidy of up to Rs 2.35 lakh

6. Middle Income Groups with annual incomes above Rs 6 lakh and up to Rs 18 lakh per year are eligible for interest subsidy on housing loans under the new CLSS (MIG) 

7. The CLSS scheme is initially envisaged for one year 

8. As many as 70 lending institutions, including 45 Housing Finance Companies and 15 scheduled banks, signed Memoranda of Understanding (MoU) with National Housing Bank (NHB) on Wednesday for implementation of CLSS(MIG) component of Pradhan Mantri Awas Yojana (Urban) 

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