HOUSING FOR ALL – Builders to help buyers get housing subsidy

The Union government has asked banks and financial institutions to join hands with private developers to expedite the disbursal of subsidies under the Pradhan Mantri Awas Yojana to the end users
M Venkaiah Naidu, Union minister of housing and urban poverty alleviation, said houses are being constructed mainly by the private sector, while launching the updated guidelines for the Credit-linked Subsidy Scheme (CLSS) for the economically weaker sections (EWS) and the low-income group (LIG) schemes.Naidu said that on this account, builders should also be roped in to disburse the benefit of the subsidies to eligible customers.

When a buyer approaches a developer to buy a house under any of the three schemes, the developers will help the buyer avail the subsidy, which is equivalent to around Rs 2.40 lakh.

Getamber Anand, president of Credai, said developers are ready and willing to provide all assistance to customers in this endeavour. He said banks and financial institutions are also forthcoming in disbursing the subsidies.

R K Arora, CMD of Supertech, says: “When a buyer comes to a developer to buy a house, the company will take the customer to a bank to avail the subsidy. We will play a proactive role to help buyers in getting the subsidy, as it is in our interest, too, to sell our units. A subsidy will certainly help us in marketing our units better.“

Till date, under the CLSS for the EWS and the LIG segments, an upfront interest subsidy of Rs 421 crore has been disbursed by NHB through 85 institutions, covering over 23,000 beneficiary households across 30 states and Union territories.

The updated guidelines for CLSS for EWS and LIG schemes were launched by Naidu, in which the maximum tenure of the eligible period for subsidy has been increased from 15 years to 20 years, for loans sanctioned on or after January 1, 2017, which has pushed up the maximum subsidy available under the scheme from Rs 2.20 lakh to Rs 2.67 lakh. This will further boost affordability among the vulnerable segments.

Prime Minister Narendra Modi, in his Address to the Nation on New Year’s Eve, announced the launch of a new interest subsidy scheme for the middle-income group (MIG). The scheme envisages extending interest subsidy to two categories of borrowers, namely, MIG I and MIG II.

MIG I households are defined as those with an annual income between Rs 6,00,001 and up to Rs 12,00,000 and MIG II households are defined as those with an annual income between Rs 12,00,001 and up to Rs 18,00,000.

The CLSS for MIG I and MIG II will be implemented, initially for a period of one year, with effect from January 1, 2017. However, Naidu said that it will be reviewed and could be extended further.

As per the terms of the scheme, beneficiary from the MIG would be eligible for an interest subsidy at the rate of 4% and 3% for MIG I and MIG II, respectively, for a maximum loan tenure of 20 years. The creditlinked subsidy is available only for loan amounts of up to Rs 9 lakh and Rs 12 lakh, for MIG I and MIG II, respectively, and additional loans above these limits will be at the nonsubsidized rate.

The interest subsidy will be credited upfront to the home loan account of beneficiaries, reducing the EMIs and improving affordability. The carpet area of houses should be up to 90 sq metres and 110 sq metres for MIG I and MIG II, respectively. The maximum interest subsidy benefit will be approximately Rs 2.35 lakh for MIG I and Rs 2.30 lakh for MIG II. Naidu said that recent developments in the financial sector, which lead to reduction in interest rates, coupled with various fiscal incentives provided by the government would further boost affordability and provide a big opportunity to the housing sector.

Naidu said that the central government is taking up the issue of reduction in stamp duty, particularly for affordable housing, to ensure uniformity in stamp duty structure. He also said the flow of interest subsidy benefits would not only just go to the bottom of the pyramid, but also to the middle of the pyramid.

Source : TOI dated 25/03/2017

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