Home Loan Subsidy by Government in 2024 - Eligibility and Rules

Home Loan Subsidy

BASIC TEAM

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Last updated on 8th February 2024

In the past decade or so, there has been an upswing in the demand for home loans across the country. One of the reasons for it could be attributed to the fact that today all major banks and financial institutions are offering affordable housing loans. Looking at this positive trend and in order to further aid home buyers, the Government of India launched a home loan subsidy scheme called the Pradhan Mantri Awas Yojna (PMAY) in 2015. Under this scheme, the government had aimed that every household in India must have a pucca house by 2022; however, the timeline of this home loan subsidy scheme has now been extended up to 2024. You can use a PMAY subsidy calculator to check the exact 2.67 lakh subsidy on home loan that you get under PMAY scheme.

Table of Contents

What is the Credit Linked Subsidy Scheme (CLSS)?

The PMAY scheme offers subsidy on home loan by the government to individuals if they meet the requisite criteria. The subsidy on the home loan interest under PMAY scheme is provided under the Credit Linked Subsidy Scheme (CLSS), which one of the parts of the PMAY. The CLSS scheme offers govt subsidy on home loan to applicants who fall under the following income categories:

  • MIG – II (Middle Income Group 2)
  • MIG – I (Middle Income Group 1)
  • EWS (Economically Weaker Section)/LIG (Low Income Group)
  • Revised EWS (Economically Weaker Section)/LIG (Low Income Group)

Home Loan Subsidy Eligibility Criteria

Beneficiary Annual Income
Middle Income Group II (MIG II) ₹12 lakh to ₹18 lakh
Middle Income Group I (MIG I) ₹6 lakh to ₹12 lakh
Lower Income Group (LIG) ₹3 lakh to ₹6 lakh
Economically Weaker Section (EWS) Up to ₹3 lakh

In addition to these, individuals belonging to ST, SC and OBC categories are also eligible under this scheme. Further, there is provision for subsidy on home loan for ladies under this scheme, in case they fall under LIG and EWS income groups. Individuals can also use a home loan eligibility calculator to simply check their eligibility for PMAY scheme.

Suggested read: Home Loan Eligibility for Self Employed

PMAY Home Loan Subsidy 2024 Categorization

Category Interest Subsidy Maximum Loan for Subsidy
MIG II 3.00% p.a. ₹12 lakh
MIG I 4.00% p.a. ₹9 lakh
LIG 6.50% p.a. ₹6 lakh

MIG II

Under the MIG II category, an individual can avail housing loan subsidy on a maximum loan amount of ₹12 lakh with the subsidy interest being 3% p.a. The maximum term of a loan based on which the subsidy can be calculated is 20 years. The maximum subsidy amount that is available under this scheme is ₹2.30 lakh.

MIG I

Applicants belonging to the MIG I category can avail home loan subsidy at the rate of 4% on a maximum loan amount of ₹9 lakh. The maximum subsidy amount one can get under this category is ₹2.35 lakh. The maximum loan tenure that will be taken into consideration for calculation of loan subsidy is 20 years. 

Suggested read: Best Home Loan Bank in India

EWS/LIG

Those falling under the Economically Weaker Sections (EWS) or Low Income Group (LIG) category can get a subsidy at the rate of 6.50% on a loan amount up to ₹6 lakh. The maximum subsidy loan amount one gets under this category is ₹2.67 lakh. The maximum loan term on which the house loan interest rate subsidy is being offered is 20 years. 

10 Banks Offering Govt Subsidy on Home Loans in India

  • State Bank of India
  • Bank of India
  • Bank of Baroda
  • Axis Bank
  • Punjab National Bank
  • IDFC First Bank
  • HDFC Bank
  • Bandhan Bank
  • Canara Bank
  • IDBI Bank

So if you planning to avail best housing loans in India and you fall under either EWS/LIG/MIG I/MIG II income categories, you can easily get an interest subsidy on your house loan under the PMAY scheme of the Government of India, quite easily.

FAQs About Subsidy for Home Loan

It generally takes around 3 to 4 months for the subsidy amount from PMAY to be credited to the beneficiary’s bank account.

Any woman who is running a family and falls under the LIG or EWS category can apply for a house loan under the scheme. However, if any other member of the family residing with the woman has also applied for the loan subsidy under the scheme, then in that case the woman’s application will be rejected.

All senior citizens applying under the PMAY scheme will be given priority for ground floor housing. However, since this priority is shared with differently-abled beneficiaries, senior citizens need to apply under this scheme early.

The proposed deadline for this project was 2022; however, it has been extended till the end of 2024. However, this may be further extended to benefit more and more families from different regions of the country.

The maximum annual income one should not be more than ₹18 lakh. On the other hand, there are no lower limits for the PMAY scheme eligibility.

In order to fill the online application of PMAY, it is mandatory for all citizens of India to have an Aadhaar Card. Those not having an Aadhaar Card can get it done from their nearest Common Service Centers (CSC).

Yes. There is nominal application fee of ₹25 plus service tax, if you process your application at the Common Service Centres. However, there are no charges for online applications.

Published on 25th July 2023