POLICY WATCH - MAKE THE MOST OF IT

Jul 01 2017 : The Times of India (Pune)

Neha Nagpal

Magicbricks Bureau





Mid-income group can avail credit-linked subsidy scheme for one year from the date of the announcement

If you have a salary within Rs 12 lakh-Rs 18 lakh per annum and you plan to buy a house, don't forget the benefits offered by Prime Minister Modi which can bring down your home loan cost, resulting in savings.The Prime Minister's announcement on December 31, 2016, of two new credit subsidy schemes for the middle classes MIG 1 and 2 included the mid income group under the Housing for All mission. The scheme is valid for one year from the date of the announcement.
WHAT YOU CAN GET?
Now, young professionals with an annual income of Rs six lakh to Rs 12 lakh can avail a housing subsidy of four per cent and those with annual income levels of Rs 12 lakh -Rs 18 lakh can avail subsidy up to three per cent. To understand this better, if someone earns Rs 18 lakh per annum, she is eligible for a subsidy of three per cent on the first Rs 12 lakh of the total loan amount. For example, if you plan to buy a house worth Rs 75 lakh, you are eligible for a home loan of 80 per cent of this amount which is Rs 60 lakh (All banks have different eligibility criteria). The remaining amount has to be paid by the borrower. Once your loan gets sanctioned, the bank sends your application to the National Housing Bank (NHB) for a CLSS subsidy wherein NHB evaluates it.
After a green signal from NHB, the borrower gets the subsidy of Rs 2.30 lakh (three per cent interest on Rs 12 lakh), which is credited directly into his account by the bank. On the remaining amount (in this case Rs 60 Rs 2.30 lakh = Rs 57.70 lakh) , the borrower will have to pay the EMI, as per the current home loan interest rates, depending upon the bank she takes the loan from.
“Once a fortnight, we send the list of eligible borrowers and cases to NHB. They take about a week's time to check the documentation and revert to the bank with the subsided amount. As soon as the subsidy comes to us, within two to three days we credit the subsidy into the borrowers account,“ informs Renu Sud Karnad, MD HDFC Bank.The subsidy is for those borrowers who have applied since January 1, 2017.
“Banks have enough money to lend, consumers need to take benefit of it,“ said M Venkaiah Naidu, Union minister of urban development, housing and urban poverty alleviation, in an exclusive interview with Magicbricks.
“The idea behind the scheme is the constant upgrade. With this, we are ensuring that the poor should upgrade to lower mid class and the lower mid class upgrades to the mid income segment.Hence, we have also covered the mid segment under the scheme,“ added Naidu.
The announcement is also seen as a much-needed push to the real estate market. This means that over 55 per cent of the stock that is actively traded and listed on property portals like Magicbricks.com are between Rs 40 lakh-Rs 70 lakh which comes under the category of MIG I and MIG II.