Govt floats new interest subsidy scheme for home loan seekers

New Delhi: The Ministry of Housing of Urban Poverty Alleviation under its new Credit Linked Subsidy Scheme has decided to give interest subsidy to the home loan applicants with annual income from Rs 6 lakh to Rs 18 lakh.

The scheme has been launched for one year. "The applicants of Middle Income Groups (CLSS-MIG) whose loans have been sanctioned or under consideration since January 1, 2017 are eligible for interest subsidy," said the government in a press statement.

“Large scale incentivisation of affordable housing will boost real estate sector, resulting in employment generation as well,” said M Venkaiah Naidu, Minister of Housing and Urban Poverty Alleviation.

Earlier, Prime Minister Narendra Modi had declared an interest subsidy of four per cent on home loans of up to Rs 9 lakh for the applicants earning up to Rs 12 lakh per annum. He had also announced a interest subsidy of three per cent on housing loans up to Rs 12 lakh for the people earning up to Rs 18 lakh per year.

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According to the norms, the time period of such loans has been capped at 20 years. The entire interest subsidy accruing on such housing loan amounts will be given to the beneficiaries in advance, which will reduce the load of Equated Monthly Instalment (EMI).

The MIG applicants who have applied for loans of Rs 9 lakh and Rs 12 lakh will be entitled to interest subsidy of Rs 2.35 lakh and Rs 2.30 lakh, respectively.

The interest subsidy will be given on loans for construction or acquisition of a house which has a carpet area of up to 90 sqm to those earning Rs 12 lakh per year. People earning up to Rs 18 lakh per annum can have the subsidy on a purchase of a house having a carpet area up to 110 sqm.