All You Need To Know About The Home Loan Interest Subsidy Of 2016

When it comes to applying for a housing loan, there are plenty of factors that need to be taken into consideration. For one, the interest rate is one of the most important factors that any home loan applicant must be aware of. But while there are many factors that determine the rate of interest for such a loan, the regulation of the government is one such factor. It is this regulation that also determines whether applicants can be at an advantage or disadvantage when applying for any home loans. However, in this year, the government has introduced a benefit to home loan owners, which is the home loan interest subsidy.

This credit linked subsidy scheme wherein which an interest subsidy of 6.5% has been announced, reducing the burden on home buyers. Given below is all one needs to know about this interest subsidy:

Who will benefit from this scheme?

These home loans interest subsidies are designed to benefit the economically weaker section in society. However, these individuals would need to satisfy certain criteria’s before being eligible for this scheme. They include:

* The age of the individual should not exceed more than 70 years as on date.

* The annual household income should not exceed Rs. 3 lakh.

* At the same time, marginalised sections of society, such as disabled, transgenders, women, widows and SC & ST will get priority.

* Lower income group who possess an annual household income between Rs. 3 to 6 lakh will be eligible for this scheme.

* Individuals who do not have any other home – ownership under their name or family name will be qualified for this scheme.

How much can one benefit from this scheme?

Individuals who are applying for this housing loan interest subsidy can get a maximum subsidy on a loan amount of Rs. 6 lakh for a maximum loan tenure of 15 years, with an interest of 6.5 %. Therefore, if a lender gets an interest rate of 10%, the actual payable interest rate will be only 3.5%.

For what purpose can this scheme be used?

Borrowers who are either buying a home that is under construction, ready to occupy the home, self – constructed or even extension building can apply for this home loans interest subsidies. However, the maximum size should not exceed 30 sq. mts carpet area for the EWS section and 60 sq. mts carpet area for LIG section.

Who has the authority to provide this facility?

As of now, the government has identified the HUDCO and NHB as central nodal agencies that will tie up with the lender to provide this facility.

What is the process to apply for this scheme?

An applicant would only need to apply for a home loan, at any of the CLSS approved financial institutions. Once the credit appraisal has been provided, a specific form supplies by the CAN’s will be sent to the HUDCO or NHB. This authoritative organisation will revert to the lender with approval after due verification. The lender will then provide the disbursed loan which will be adjusted along with the subsidy.