Government announces interest subsidy on home loans

New Delhi : Bonanza offer for home loan seekers as the government has decided to give interest subsidy up to 2.25 per cent to the applicants with annual income from Rs 6 Lakh to Rs 18 lakh per annum. 

The subsidy has been enabled under the new Credit Linked Subsidy Scheme for Middle Income Groups (CLSS-MIG) by the Ministry of Housing and Urban Poverty Alleviation.

Home loans issued post January 1, 2017 will be eligible for the scheme.

Venkaiah Naidu: "Those who have been sanctioned housing loans and whose applications are under consideration since January 1 this year are eligible for interest subsidy."

"Large scale incentivisation of affordable housing will boost real estate sector, resulting in employment generation as well."

Recently Prime Minister Narendra Modi had announced an interest subsidy of 4 per cent to the home loan seekers with an annual income up to Rs 9 lakhs.

Key takeaways:

1: The tenure of the home loan has been capped to 20 years.

2: The total interest subsidy to be paid to MIG appliants on a Rs 9-lakh loan comes to Rs 2.35 lakh and on a loan of Rs 12 lakh, it comes to Rs 2.30 lakh per beneficiary.

3: Beneficiaries eligible for interest subsidy under CLSS can directly apply to the lending institutions.

4: National Housing Board (NHB) and Housing and Urban Development Corporation (HUDCO) have been designated as Central Nodal Agencies for implementation of CLSS.