The second phase of Pradhan Mantri Awas Yojana (PMAY) was launched recently. In this context, eligible people benefit from a concession on the home loan thanks to the credit linked subsidy program (CLSS). But many people don’t know that the government can withdraw the subsidy if certain conditions of the program are not met.
When can the grant be withdrawn?
Generally speaking, there are three circumstances in which a credit-related subsidy may be withdrawn.
first position: If the borrower fails to pay the loan installments to the bank and the loan becomes NPA. This means that its recovery is not possible.Second case: When the credit was granted to the person concerned, but for certain reasons the construction of the house was stopped. In such a situation, the subsidy amount will have to be returned to the government.Third situation: The government can withdraw the subsidy if the certificate of use of the house is not presented. The lending bank is required to submit the use/end use certificate to the nodal agency for completion of construction of the house within one year from the date of disbursement of the first tranche of the loan amount or within a maximum period of 36 months. In the absence of this certificate, the bank must return the subsidy to the nodal agency concerned.
A single grant in the family
Under this program, a single grant is paid to each family member. This includes husband, wife and unmarried children.
What happens when EMI is removed?
When the subsidy ends, the lender has to return to the original interest rate, leading to an increase in EMIs.
Can you benefit from the PMAY subsidy if you already have a home loan?
You cannot avail PMAY subsidy on an existing home loan. The PMAY subsidy is intended for those who are purchasing a home for the first time.