HDFC Ltd, India’s premier housing finance company, has become the first financial institution in the country to disburse subsidy to over 51,000 customers amounting to over Rs. 1,100 crore (USD 155 million) under the Credit-Linked Subsidy Scheme (CLSS) – the flagship scheme of Government of India’s Pradhan Mantri Awas Yojana (PMAY).
HDFC has provided loans of over Rs 9,800 crore under PMAY-CLSS, to these customers belonging to the EWS (Economically Weaker Section), LIG (Low Income Group) and Middle Income Group (MIG) categories.
HDFC, in line with its vision for providing affordable housing to all, has been partnering with the government to take the scheme, ‘Pradhan Mantri Awas Yojana’ to the real beneficiaries i.e. EWS, LIG, and MIG categories.
Renu Sud Karnad, Managing Director, HDFC Ltd said, “The government has laid extraordinary focus on affordable housing with the launch of PMAY. Given the excellent response to the scheme, the government has improved the scheme from time to time. This has renewed the interest of homebuyers in the Indian real estate sector and allowed first time home buyers to avail these benefits to own a house. This has been possible only because of the Prime Minister’s vision of providing ‘Housing For All’ by 2022.”
HDFC, in order to educate customers about the benefits of these schemes, has been conducting seminars, presentations, Q&A sessions and on the spot counseling on a war footing across the country. They have trained over 30,000 developers, channel employees and staff members to mainstream these schemes to a wider audience.
During the quarter ended September 2018, HDFC Ltd approved 37% of home loans in volume terms and 18% in value terms to customers from the EWS and LIG segments. On an average, 8,300 loans are being approved on a monthly basis to both these segments with the average home loan size standing at Rs. 10.1 lakh and Rs. 17.6 lakh respectively.
Credit Linked Subsidy Scheme (CLSS) was introduced in June 2015 under Pradhan Mantri Awas Yojana (PMAY) for home loans to customers from the Economically Weaker Section (EWS), Low Income Group (LIG) and was extended to Middle Income Group (MIG) from Jan -2017. As per the scheme, borrowers are eligible for an interest subsidy of 6.5% pa for loans up to Rs. 6,00,000 for EWS and LIG categories (annual household income up to Rs. 6,00,000), interest subsidy of 4% and 3% for loans up to Rs. 9,00,000 and Rs. 12,00,000 respectively for the MIG categories (annual household income between Rs. 6,00,001 & Rs. 18,00,000) for a maximum tenure of 20 years. The effective subsidy to the customer is in the range of Rs 2.30 – 2.67 lakhs on 20-year term receivable upfront. The schemes for MIG are valid up to 31st March 2019 and schemes for EWS/LIG are valid up to 31st March 2022.