What is CLSS Scheme? Complete Guide & Application Process

What is CLSS Scheme? Complete Guide & Application Process

Owning a home is a dream for many families, and the Government of India has introduced several initiatives to make housing more affordable. One such initiative is the Credit Linked Subsidy Scheme (CLSS), offered under the Pradhan Mantri Awas Yojana (PMAY). This scheme provides an interest subsidy on home loans, helping eligible families reduce their EMI burden and making housing finance more accessible. Designed especially for economically weaker sections (EWS), lower income groups (LIG), and middle-income groups (MIG), the CLSS scheme ensures affordable housing opportunities across India.

What is CLSS Scheme?

The Credit Linked Subsidy Scheme (CLSS) is a government initiative under the Pradhan Mantri Awas Yojana (PMAY) to make affordable housing accessible to all families across India. It provides an interest subsidy on Home Loan products, reducing the cost of borrowing for eligible applicants through Affordable Housing Loan options.

The scheme is designed for the Economically Weaker Section (EWS), Low Income Group (LIG) and Middle-Income Group (MIG) households. By lowering the effective interest rate on housing loans, CLSS allows families to purchase, construct or extend their homes without facing an excessive financial burden.

Also Read: Affordable Housing Loan: Everything You Need to Know

Key Features of the Credit Linked Subsidy Scheme

The Credit Linked Subsidy Scheme (CLSS) under PMAY is designed to make homeownership affordable by reducing the effective interest rate on housing loans. It directly benefits eligible families by offering an upfront subsidy on loan amounts, making EMIs lighter and homes more accessible. Below are the major features of the scheme:

1. Targeted Income Groups

The scheme is available for EWS, LIG, MIG-I, and MIG-II categories, ensuring that households across income levels can benefit.

2. Upfront Subsidy Credited to Loan Account

The interest subsidy is directly credited to the borrower’s loan account, reducing the principal amount and lowering EMIs.

3. Applicable for Purchase, Construction, or Extension of House

CLSS benefits can be availed for buying, building, or extending a residential property.

4. First-Time Homebuyer Requirement

Only first-time homebuyers who do not own a pucca house in any part of India are eligible.

5. No Prior Central Housing Assistance

Applicants should not have availed benefits under any other central government housing scheme.

6. Property Location Restricted to Statutory Towns

The property must be located in statutory towns as per the 2011 Census or updated notifications.

7. Maximum Loan Tenure: 20 Years

The subsidy is applicable for a maximum loan tenure of 20 years or the actual loan tenure, whichever is lower.

8. Mandatory Woman Co-Ownership for EWS & LIG

For EWS and LIG categories, a female member must be co-owner of the property to promote women empowerment.

9. Carpet Area Limits Defined Per Income Category

Carpet area caps vary: 30–60 sq. m. for EWS/LIG, 120 sq. m. for MIG-I, and 150 sq. m. for MIG-II.

10. Beneficiary Preference for Vulnerable Groups

Special preference is given to women, widows, SC/ST, OBC, and differently-abled applicants.

11. Central Nodal Agencies

The scheme is implemented through HUDCO, NHB, and SBI as Central Nodal Agencies, with support from primary lending institutions.

12. Online Tracking via CLSS Awas Portal (CLAP)

Applicants can track their subsidy status online through the CLSS Awas Portal (CLAP) for better transparency.

Who is Eligible for the CLSS Scheme?

Eligibility is determined by income levels, first-time homebuyer status and property ownership criteria. Applicants must not have previously availed of central housing assistance under other government schemes. Additionally, for EWS and LIG categories, a female family member must be listed as the co-owner of the property.

Also Read: Is Affordable Housing Loan Beneficial for Women as Primary Borrowers?

Beneficiaries must belong to statutory towns as per the 2011 Census, and the property should fall within the carpet area and loan limit guidelines.

Eligibility Criteria by Income Group

Income Group: EWS
Annual Household Income: Up to ₹3 lakhs

Maximum Carpet Area: 30 sq.m.
Subsidy Rate: 6.5%
Maximum Loan Considered for Subsidy: ₹6 lakhs

Income Group: LIG
Annual Household Income: ₹3-6 lakhs

Maximum Carpet Area: 60 sq.m.
Subsidy Rate: 6.5%
Maximum Loan Considered for Subsidy: ₹6 lakhs

Income Group: MIG I
Annual Household Income: ₹6 -12 lakhs

Maximum Carpet Area: 160 sq.m.
Subsidy Rate: 4%
Maximum Loan Considered for Subsidy: ₹9 lakhs

Income Group: MIG II
Annual Household Income: ₹12 -18 lakhs

Maximum Carpet Area: 200 sq.m.
Subsidy Rate: 3%
Maximum Loan Considered for Subsidy: ₹12 lakhs

How Does the CLSS Scheme Work?

The scheme reduces the loan burden by applying an upfront interest subsidy. The subsidy is calculated on the loan principal up to the prescribed cap for each income group. Once approved, the subsidy is credited directly to the borrower’s loan account, reducing the outstanding amount. This leads to a lower principal, which in turn reduces monthly EMIs.

For example, if a borrower from the LIG category takes a Home Loan, a subsidy of up to ₹2.67 lakhs can be availed depending on the loan amount and tenure. The remaining loan balance is charged at the normal interest rate set by the lender.

The scheme applies only to loans sanctioned for a maximum tenure of 20 years. Lending institutions such as Godrej Capital also offer Affordable Housing Loan options, ensuring wide access to beneficiaries.

Step-by-Step Guide: How to Apply for CLSS

1. Check Eligibility:

Confirm income group and property conditions. You can also use Home Loan Eligibility Calculator to understand your eligibility or Home Loan EMI Calculator

2. Choose a Lender:

Approach a bank, housing finance company, or NBFC recognised under PMAY.Godrej Capital offers Affordable Housing Loan options at lower interest rates and longerloan tenures with complete transparency and no hidden charges.

3. Fill CLSS Application Form:

Submit details of income, property and loan request.

4. Submit Documents:

Provide identity proof, income proof, property papers, Aadhaar, PAN and other necessary documents.

5. Verification Process:

The lender verifies eligibility and forwards the claim to the nodal agency.

6. Subsidy Credit:

Once approved, the subsidy is transferred to the lender, reducing the principal balance.

7. Track Application:

Applicants can track subsidy disbursal through the lender or PMAY website.

Documents Required for CLSS Application

• Identity proof such as Aadhaar, PAN, Voter ID or Passport
• Income proof such as salary slips, IT returns or Form 16
• Property documents such as agreement, title or approved plan
• Loan sanction letter from the lender
• Address proof
• Photograph of the applicant and co-applicant

Benefits of Availing CLSS Scheme Under PMAY

Availing CLSS provides multiple benefits:

1. Primary Financial Benefits

• Reduced Interest Burden – CLSS subsidy lowers the interest rate on your home loan, making repayments more manageable.
• Lower EMIs – With interest subsidy credited upfront, borrowers enjoy smaller monthly installments, improving affordability.
• Substantial Savings – The scheme helps families save significantly over the loan tenure due to lower total interest outgo.
• Higher Loan Eligibility – With reduced EMIs, borrowers can avail higher loan amounts, making it easier to afford better homes.

2. Broader Social & Economic Benefits

• Financial Inclusion – CLSS promotes housing access for low- and middle-income households, ensuring broader participation in the housing market.
• Empowers Women – Mandatory female co-ownership in EWS and LIG categories encourages women’s property ownership and empowerment.
• Promotes Social Equity – Preference for vulnerable groups like SC/ST, OBC, widows, and differently-abled citizens ensures inclusive development.
• Supports Multiple Housing Needs – The scheme covers purchase, construction, or extension, catering to diverse housing requirements.
• Transparent Process – With subsidy tracking through CLSS Awas Portal (CLAP), applicants benefit from a clear and transparent system.

*Maximum subsidy calculated as interest subsidy credited upfront on eligible loan amount.

CLSS Subsidy Status: How to Track Your Application

Once you have applied for the CLSS subsidy under PMAY, it is important to monitor the status of your application. Tracking ensures you know whether your subsidy has been processed, approved, and released. You can check the status online, via mobile app, or offline through your lender or government helplines.

1. Online (CLSS Awas Portal – CLAP)

• Visit the official portal: pmayuclap.gov.in
• Click on CLSS Tracker
• Enter your 11-digit Application ID
• Click Get Status → an OTP will be sent to your registered mobile number
• Enter the OTP to view your subsidy status, which includes the following stages:
  • Application ID Generated
  • Due Diligence by Primary Lending Institution (PLI)
  • Claim Uploaded on Central Nodal Agency (CNA) Portal
  • Subsidy Claim Approved
  • Subsidy Released to PLI

2. Via UMANG App (PMAY-Gramin)

• Log in to the UMANG app
• Search for “Pradhan Mantri Awas Yojana”
• Go to Installment Details
• Enter your PMAY-G registration number to check the status of your subsidy installment

3. Offline

• Contact your lending institution (bank or HFC) to inquire about your subsidy
• Call the toll-free helplines:
  • NHB: 1800-11-3377 / 1800-11-3388
  • HUDCO: 1800-11-6163

4. If Status is Delayed

• The normal processing time for CLSS subsidy is approximately 3–4 months
• If there is no update, follow up with your lender or call the PMAY helplines for assistance

Common Myths & Misconceptions About CLSS Scheme

• Myth: CLSS is available for any loan amount.
  Fact: Subsidy is limited to loan caps set for each income group.
• Myth: Existing homeowners can also benefit.
  Fact: Only first-time homebuyers are eligible.
• Myth: Subsidy applies to loans beyond 20 years.
  Fact: Subsidy is applicable only for a maximum tenure of 20 years.
• Myth: Only banks offer CLSS.
  Fact: Housing finance companies and NBFCs are also recognised lenders.

Apply now for an Affordable Housing Loan.

FAQs

Q.1. Can existing homeowners apply for CLSS?

A. No, the scheme is strictly for first-time homebuyers.

Q.2. Is CLSS applicable for home renovation or extension?

A. Yes, it is applicable for home construction, purchase or extension, subject to eligibility.

Q.3. What happens if I sell the house before loan repayment?

A. The subsidy benefit remains, but future claims under PMAY will not be allowed.

Q.4. Can NRIs avail benefits under CLSS?

A. No, the scheme is only for Indian citizens residing in the country.

Q.5. How long does it take to get the subsidy credited?

A. Generally, it takes three to six months after verification.

Q.6. Is there any processing fee for applying for CLSS?

A. No, lenders cannot charge additional processing fees for CLSS applications.

Q.7. Which income groups are covered under CLSS?

A. The CLSS scheme covers four main income groups: Economically Weaker Section (EWS), Lower Income Group (LIG), Middle Income Group-I (MIG-I), and Middle Income Group-II (MIG-II). Each group has different eligibility criteria and subsidy rates.

Q.8. What are the income eligibility criteria for EWS, LIG, and MIG categories?

• EWS: Annual household income up to ₹3 lakhs
• LIG: ₹3–6 lakhs
• MIG-I: ₹6–12 lakhs
• MIG-II: ₹12–18 lakhs

These income limits determine the interest subsidy applicable under the CLSS scheme.

Q.9. Can I apply for CLSS if I already own a plot but no house?

A. Yes, you can apply for CLSS as long as you do not own a pucca house anywhere in India. Owning just a plot does not disqualify you from the subsidy.

Q.10. Is CLSS applicable for purchasing a resale property?

A. Yes, the CLSS subsidy is available for both new and resale homes, provided the property meets the other eligibility criteria set under PMAY.

Q.11. Are women applicants given any preference under CLSS?

A. Yes, female co-ownership is mandatory for EWS and LIG categories, promoting women empowerment and property ownership. Preference is also given to widows and single women applicants.

Q.12. Can unmarried individuals apply for CLSS benefits?

A. Yes, unmarried individuals are eligible as long as they meet the income, property, and other eligibility conditions.

Q.13. What is the carpet area limit for homes under CLSS?

• EWS: Up to 30 sq.m.
• LIG: Up to 60 sq.m.
• MIG-I: Up to 120 sq.m.
• MIG-II: Up to 200 sq.m.

The carpet area is the usable area of the house and determines eligibility for the subsidy.

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