Home Loan Subsidy by Government in 2026 – Eligibility and Rules

If you’re a home loan applicant, you would be delighted to know about home loan subsidy schemes. Under affordable housing schemes, the Government of India offers various subsidies, making buying your dream home more plausible. These home loan subsidy schemes by the government guarantee fund assistance for buying or constructing a Pucca home. 

Under the “Pradhan Mantri Awaas Yojna” (PMAY) subsidy on home loan, the government ensures that the PMAY subsidy benefits applicants living in both urban and rural areas. In this blog, we are going to discuss various PMAY subsidies, their eligibility, and the essential rules.

Credit-Linked Subsidy Scheme Helpline Number

If beneficiaries have any enquiries about the Credit-Linked Subsidy Scheme under PMAY subsidy schemes, please contact the Ministry of Housing and Urban Poverty Alleviation.

PMAY Home Loan Subsidy 2026 Categorisation

Under the government’s home loan subsidy, the PMAY subsidy is designed to cater to people from various categories. People may get a subsidy on a home loan based on which category they belong to. 

EWS (Economically Weaker Section) 

If your household income is less than Rs. 3 Lakhs annually and you don’t have a Pucca house, you can avail PMAY Subsidy for constructing a permanent house. The interest rate subsidy is 6.50% p.a., and the subsidy on home loan is ₹6 Lakhs.

LIG (Low Income Group)

Those who apply under the LIG category for PMAY Subsidy must have annual household earnings in the range of ₹3 Lakhs & ₹6 Lakhs. The interest rate subsidy is the same as LIG (Low Income Group), which is 6.50% p.a. You can avail the subsidy on home loan up to ₹6 Lakhs if you don’t own a Pucca House. 

MIG (Middle Income Group 1)

People from MIG can avail a home loan subsidy of up to ₹9 Lakhs at 4.00% p.a. For MIG 1 categories, the annual household income of the applicant should be between ₹6 Lakhs and ₹12 Lakhs. If you or your family member doesn’t have any Pucca house, you are eligible for home loan subsidy under PMAY subsidy scheme.

MIG 2 (Middle Income Group 2)

To be eligible for the MIG 2 scheme, your household income should be more than ₹12 Lakhs and less than ₹18 Lakhs. You can get up to ₹18 Lakhs of home loan subsidy from the government and 4% interest rate subsidy.  This subsidy on home loan ensures that people from the MIG category who don’t have a house can get a permanent home with 200 sq. meter carpet area.  

PMAY Subsidy – Home Loan Subsidy by Government 

Pradhan Mantri Awas Yojna, प्रधानमंत्री ग्रामीण आवास योजना or PMAY, is a home loan subsidy scheme for people who don’t have enough funds to build their home. These PMAY subsidy schemes cover both urban and rural citizens through PMAY-U (Urban) 2.0 and & PMAY-G (Gramin) respectively.

PMAY-U (Urban) home loan subsidy by government mainly benefits people of the Lower Income Group (LIG) and the Medium Income Group (MIG). The government identifies potential beneficiaries from LIG and MIG by their annual income and gives a subsidy on the interest rate of up to Rs 1.80 lac. 

Whereas, PMAY-G (Gramin) benefits people living in rural areas by providing financial help for constructing a Pucca house in rural areas. 

Pradhan Mantri Awas Yojana (PMAY) Subsidy Schemes

There are two Pradhan Mantri Awas Yojana subsidy (PMAY subsidy) for both urban and rural areas. They are – 

PMAY-U (Urban) – A Complete Overview

PMAY-U 2.0, an update to PMAY-U, is designed to cater to housing needs for the homeless or people with kutcha houses in urban settlements. This home loan subsidy by government is ensured by more than ₹10 lakh crore in funding, in which ₹2.30 lakh crore comes from government subsidy. The objective is to provide more than 1 crore homes to permanently shelterless residents of urban India. 

How PMAY-U (Urban) 2.0 is Different from PMAY Subsidy 1.0?

Discontinued in 2022, PMAY-U (Urban) 1.0 is the foundation stone for PMAY-U (Urban) 2.0, as they both share a similar vision – “housing for all”. The newer version, i.e., PMAY-U (Urban) 2.0, ensures that the compensation and home loan subsidy scheme is fair and not misused. Some of the key differences between PMAY-U (Urban) 2.0 and PMAY-U (Urban) are as follows:

1. The newer version increases the home loan subsidy assistance to ₹2.5 lakh for beneficiary-led construction (BLC) and Affordable Housing in partnership (AHP) projects. In the earlier version of the same program, the maximum financial assistance was ₹1.5 lakh.
2. PMAY-U (Urban) 2.0 aims to provide affordable house ownership as well as affordable rental housing to people from economic backgrounds. The older PMAY-U focused on providing affordable housing schemes and rebates to people living in slums.
3. PMAY-U (Urban) 1.0 provided a wide range of PMAY subsidies for the medium-income group and capped the maximum annual income to ₹12 lakh. In newer programs, the medium-income group is only eligible for PMAY subsidy for MIG flats if their net income is lower than ₹9 lakh annually. 
4. The newer PMAY-U provides a subsidy on home loan through the Interest Subsidy Scheme (ISS), whereas the older version used the Credit Linked Subsidy Scheme (CLSS). The difference is that in the older version, the home loan subsidy by the government was a lump sum amount, whereas through ISS, PMAY subsidy provides a home loan subsidy on the principal amount. It means that your home loan EMI is less since there is a subsidy of 4% of the principal loan amount up to ₹8 lac.

PMAY-G (Gramin) – A Complete Overview

PMAY-G (Gramin), an acronym for Pradhan Mantri Aawaas Yojna, is a rural affordable housing scheme by the Indian government to ensure housing for all. This scheme aims to provide a pucca house to those who can’t afford to build their own house. Through this scheme, the government provides a direct benefit transfer (DBT) of up to ₹1.20 lac for plain areas and ₹1.30 lac for hilly areas or areas where construction is slightly harder.

Apart from that, one can also avail a home loan subsidy by government by taking a home loan of up to ₹70,000 at a lower interest rate. Unlike PMAY-U, there are no changes made in PMAY-G (Gramin), and the government continues to pay the home loan subsidy through the same scheme. 

Factors that Might Affect PMAY Subsidy

Several factors may impact the PMAY subsidy status on a home loan for a borrower, and some of them are listed below:

1. Principal Loan Amount: The higher the principal loan amount, the higher will be the subsidy amount under the PMAY scheme. Under the PMAY scheme, the loan amount eligible for subsidy is capped to ensure that the subsidy benefits reach those who need them the most. The Pradhan Mantri Awas Yojana (PMAY) is a housing scheme for the middle class that includes a stamp duty value of up to Rs 45 lakh. The Credit Linked Subsidy Scheme (CLSS) is part of the PMAY (Urban) Mission and provides an interest subsidy that is directly credited to the beneficiary’s loan account.
2. Annual Income: The lower the annual household income, the higher the PMAY subsidy amount, and vice versa.
3. Applicant’s Creditworthiness: The CIBIL score or the general creditworthiness of the borrowers is another factor that can determine the subsidy on the PMAY scheme home loan.
4. First-Time Homebuyer: Individuals who are purchasing a home for the first time are given priority under the PMAY scheme and are most likely to get higher subsidy benefits.
5. Home Loan Tenure: The higher the home loan tenure, the higher the subsidy amount will be in a housing loan subsidy calculator.

Home Loan Subsidy Eligibility Criteria

In the table given below, you can see the Home Loan Subsidy Eligibility Criteria for various categories based on annual household income.

Who Can Apply for a Home Loan Subsidy Under PMAY?

Furthermore, there are several other eligibility criteria you need to meet to ensure that your PMAY subsidy application is approved and the home loan subsidy by government is disbursed. 

1. A borrower/potential beneficiary should belong to the ST, SC, and OBC categories can also avail PMAY subsidy, given they have all the appropriate documents. 
2. To get home loan subsidy by the government, the house value must not exceed ₹35 lakh; the maximum loan amount against which you can get home loan subsidy is ₹25 lakh.
3. One shouldn’t have a pucca house in any part of India. Additionally, their spouse or other family member shouldn’t own a permanent shelter anywhere across the country. 
4. Only new beneficiaries can avail this home loan subsidy by government; those who have availed this subsidy on a home loan in past aren’t eligible under the scheme. 

Application Process for Home Loan Subsidy

1. Visit the official website of PMAY –  pmaymis.gov.in or pmayg.nic.in. There are two separate websites for the rural and urban program. Choose what applies to your region and visit. 
2. Choose category/scheme. Select Category. 
3. Enter the required details. Provide all the information and cross-check it for accuracy. 
4. Select Category and Scheme: Choose the applicable category
5. Enter Details: Provide all necessary personal details and cross check it for accuracy.
6. Submit Documents: Upload all the required documents mentioned in the section below. 

How to Apply for a Home Loan Subsidy

To avail the benefits of a home loan subsidy, applicants can opt for the PMAY apply online procedure through the official portals for urban or rural schemes.

1. Website for Urban Applicants: PMAY Urban Official Site
2. Website for Rural Applicants: PMAY Gramin Official Site

Documents Needed & Subsidy Disbursement Timeline

Typical requirements include:

1. Identity and address proofs (Aadhaar, PAN, etc.)
2. Income proof (salary slips, tax returns)
3. Property documents (sale agreement, title documents)
4. Loan sanction letter & declaration of no prior pucca house ownership

Home loan subsidy by government is sanctioned after you complete all the stages – property verification, claim submission, approval, and transfer. The home loan subsidy by government is initiated in 3 to 6 months from the loan disbursement date. 

Why Opt for a Home Loan Subsidy under PMAY?

You must opt for home loan subsidy by government, i.e, PMAY subsidy, if you come from lower- to middle-income families. This subsidy on home loan may give a lot of benefits in terms of financial aid if you are living in a kacha ghar.

1. It reduces the overall interest burden on the borrower, which can make a significant difference in the total amount repaid over the loan’s tenure.
2. The reduction in EMI can free up monthly income for other household and personal expenses.
3. It facilitates the acquisition of property that may otherwise be financially out of reach, thereby improving the living standards of the family.

What is the Credit-Linked Subsidy Scheme (CLSS)?

PMAY scheme offers a subsidy on home loan on the basis of CLSS (Credit-Linked Subsidy Scheme). The government pays home loan subsidy on the interest rate directly to the beneficiary account. It means that you get the direct rebate on the principal amount and have to pay EMIs on the basis of the reduced amount. To ensure the fair disbursal of home loan subsidy under CLSS, the subsidy is only given to those who are building a house or buying a new one. The scheme doesn’t give any compensation or rebate to buy a plot. 

Note: The CLSS is discontinued by the government for PMAY U 2.0 subsidy in 2024. 

Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme (PMAY-CLSS Scheme) Key Details

The PMAY-CLSS offers interest subsidies on home loans based on income categories, helping reduce EMIs and make housing more affordable. Here’s a quick overview of the benefits:

The rest is 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 of a 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 the calculation of the loan subsidy is 20 years.

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 subsidy on a home loan. The maximum loan term for which the house loan interest rate subsidy is being offered is 20 years.

How to Use Pradhan Mantri Awas Yojana (PMAY) Subsidy Calculator

To use a Pradhan Mantri Awas Yojana (PMAY) subsidy calculator, you can follow these general steps:

How Do I Check the Status of the PMAY Subsidy?

You can check your PMAY subsidy using the PMAY subsidy calculation in 3 ways. 

1. Online Using Aadhaar or Application ID

• Go to the official PMAY website (https://pmaymis.gov.in).
• Find the ‘Citizen Assessment’ section and choose the appropriate category for your application.
• Enter your Aadhaar number or PMAY application ID, then submit the form to view the status of your application. 

2. Using the Assessment ID

• Visit the official website (https://pmaymis.gov.in).
• Find the “Track Your Assessment” section on the PMAY website and open it. 
• Enter your Assessment ID and check your eligibility status. 

3. Reach out on Toll-Free Number

• You can also check your PMAY subsidy by getting in touch with customer support. The CLSS  Board number is 1800-11-3377 or 1800-11-3388. Subsequently, provide your application information over the phone to receive information about your subsidy status.

Budget 2025-26 Updates: CLSS Revival for MIG Homebuyers

There is no new information on CLSS revival for MIG Homebuyers. The most recent information regarding CLSS Revival is that it might not be continued for PMAY U 2.0 schemes. Priorly, the CLSS have provided affordable housing to over millions of people. 

PMAY‑CLSS Explained: Eligibility, Subsidy & Loan Cap

The PMAY-CLSS aims to give income-based interest rebates under home loan subsidy by government to make housing more affordable. 

Note – CLSS scheme has been discontinued by the government. 

How to Apply for PMAY CLAP Home Loan Subsidy Online

To apply for this subsidy:

1. Visit your lender’s PMAY-registered platform or PMAY CLAP (CLSS Awas Portal).
2. Submit your loan application with all supporting documents.
3. Once sanctioned, your lender moves your subsidy claim file to the Central Nodal Agency. 
4. Once your claim file is accepted and approved, the subsidy on home loan is credited to your loan account. 
5. You can also track your PMAY application using the dedicated tracking feature of CLSS Awas Portal. 

State-Wise Portals & Supplementary Schemes

The abovementioned schemes have been mandated across all the states through the CLAP portal. Check the state housing board or urban development programs and their websites to get detailed information about the relevant housing scheme and its eligibility. 

Tax & GST Benefits with Home Loan Subsidy

1. Tax Benefits: Eligible borrowers can still claim deductions under Section 24 (interest) and Section 80C (principal repayment) even after applying CLSS, subject to overall limits.
2. GST Benefits: A Potential reduction in GST burden on affordable or under-construction properties was proposed in Budget 2025 to further lower costs.

Sample Saving Scenarios: EWS vs. MIG-I Savings Over 20 Years

Below is a quick comparison of how PMAY subsidies reduce EMIs and boost savings for different income groups:

10 Banks Offering Govt Subsidy on Home Loan by the Government in 2025-26

Here is a list of 10 banks in India offering a subsidy on home loans by the government in 2025-26:

1. State Bank of India
2. Bank of India
3. Bank of Baroda
4. Axis Bank
5. Punjab National Bank
6. IDFC First Bank
7. HDFC Bank
8. Bandhan Bank
9. Canara Bank
10. IDBI Bank

Check PMAY Eligibility Using BASIC’s PMAY Eligibility Calculator

As we all know, home loan rejections highly affect your credit score. That’s why you should always check your eligibility with the BASIC home loan eligibility calculator. We also have a dedicated PMAY eligibility check calculator that allows you to check if you meet all the eligibility criteria laid down by the Government of India. Once you fill in all the required details, you get an idea of how much money you can save using a home loan subsidy by the government. Apart from that, you can also seek advice and apply for the most affordable home loan in the market with BASIC. Visit BASIC and take your home loan journey forward.