Centre to launch new interest subvention scheme for urban housing

The new housing scheme will be in line with PM Narendra Modi’s Independence Day announcement to provide relief in home loans to the urban lower- and middle-class population

Repo Rate Housing

New Delhi: The Central government is set to unveil a new interest subvention scheme for urban housing in September, union minister for housing and urban affairs (MoHUA) Hardeep Singh Puri said.

Talking to media persons here on Thursday, the minister said the scheme is almost ready for the launch. “We are fleshing out the details of the scheme and then it will be in public. We are almost ready. The scheme will be announced in full details in September,” Puri said.

Also Read: Centre to offer interest subvention of 1.5% on short term agri loan

The statement comes after Prime Minister Narendra Modi announced in his Independence Day speech that the government would come up with a scheme to provide relief in home loans to the urban lower- and middle-class population.

A senior officer of MoHUA said that the new scheme will “benefit families living in cities but living in rented houses, slums, or chawls and unauthorized colonies.” The Prime Minister had announced that the Central government would assist the people with relief in interest rates and loans from banks and help them save lakhs of rupees, if they want their own houses.

Also Read: EMIs of affordable housing loan jump over 20% in last 2 years

The upcoming scheme would be in line with the credit-linked subsidy scheme (CLSS) for economically weaker sections (EWS) or lower income group (LIG) which ended in March 2022. The Pradhan Mantri Awas Yojana (Urban), which has other verticals apart from CLSS, including in-situ slum redevelopment, beneficiary-Led construction (BLC), and affordable housing in partnership, ends in December 2024. The scheme was extended to complete the houses sanctioned before 31 March, 2022.

Under CLSS, the government used to provide benefit of up to ₹2.67 lakh each through an interest subsidy of 3-6.5%. According to an update provided by the ministry on Thursday, out of the 11 million houses sanctioned under PMAY(U), 7.6 million have been completed. The CLSS scheme supported 2.5 million home buyers, showed the latest update.

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