Credit Linked Subsidy Scheme for Middle Income Group

Credit Linked Subsidy Scheme for Middle Income Group helps eligible middle-class families in India achieve homeownership by providing interest subsidies on housing loans. If you belong to the identified income brackets (MIG-I and MIG-II), you can benefit from reduced EMIs when purchasing or constructing your first home through this government scheme.

Scheme has been closed or it was a one time scheme which has been closed by the government.

Credit Linked Subsidy Scheme for Middle Income Group - Introduction

Credit Linked Subsidy Scheme for Middle Income Group was made to support the dream of homeownership for middle-income families. This scheme provides interest subsidies to help families in the Middle Income Group acquire or build their first permanent house. By lowering the loan interest burden, it made housing more affordable for families across India.

Ministry of Housing and Urban Affairs (MoHUA) launched this scheme to address the growing demand for urban housing. It was a Central Sector Scheme designed to give money help to those in the Middle Income Group. Eligible families could apply for housing loans from banks, Housing Finance Companies, and other participating lenders for home purchase, construction, or even repurchase.

This MIG vertical was part of Pradhan Mantri Awas Yojana (Urban) and ran as a time-bound scheme. It was valid up to 31 March 2020, after which fresh applications for the MIG component stopped. The relaunched PMAY-U 2.0 covers the Economically Weaker Section (EWS) and Low Income Group (LIG) verticals and does not include a separate MIG component.

Key highlights of this scheme:

Coverage: Scheme covered all Statutory towns listed in the 2011 Census, including notified planning and development areas under state legislation.

Purpose: Eligible families received an interest subsidy on home loans used for buying or building a house.

Beneficiary: A beneficiary family includes a husband, wife, and their unmarried children. An adult earning member could be treated as a separate household regardless of marital status.

Monitoring: Mission Directorate under PMAY(U) oversaw implementation. State Level committees and banking committees made sure the process ran smoothly and clearly.

Key Information

Benefits

This scheme supported home purchase or construction needs, provided the carpet area was up to 160 sq. mts. for MIG-I and 200 sq. mts. for MIG-II. New homes were expected to include basic amenities like water, sanitation, road, and electricity access.

Note: Interest subsidy applied only to the specified loan amounts. Any loan taken beyond these limits carried a non-subsidized interest rate.

Eligibility

To be eligible, a family must not own a pucca house anywhere in India. Married couples were treated as one household for this benefit. Families must not have previously availed of any central housing assistance.

Income Brackets:

1. MIG-I: Income between 6,00,001 and 12,00,000 rupees annually.

2. MIG-II: Income between 12,00,001 and 18,00,000 rupees annually.

Priority: Government gave preference to women (especially widows and single working women), SC/ST/OBC families, persons with disabilities, and transgender individuals.

Application Process

Since the MIG vertical is closed, fresh applications are no longer accepted. For those who applied earlier, the process worked through participating lenders.

STEP 1 - Visit a participating bank or financial institution that was part of the PMAY scheme.

STEP 2 - Collect and fill out the official application form.

STEP 3 - Submit the completed form along with required documents to the lender.

STEP 4 - After verification, the lender processed the loan and applied for the subsidy on behalf of the applicant.

STEP 5 - Once approved, the subsidy was credited to the home loan account, directly reducing the principal amount and future EMIs.

Documents

Eligible applicants were expected to keep the following papers ready:

• Copy of Aadhaar Card
• Copy of PAN Card
• Valid proof of residence
• Verified proof of income
• Bank account details
• Property purchase or construction documents
• Any additional documents requested by the lender

References

Official Website | Scheme Leaflet | Official Guidelines

FAQ's

What is Credit Linked Subsidy Scheme for MIG?

This was a government scheme where middle-income households received an interest subsidy on home loans, making it easier to buy or build a house. For instance, if Sachin (MIG-I) took a loan of 20 lakh rupees, he got a 4% interest subsidy on the first 9 lakh rupees, which reduced his monthly EMI.

How are income groups divided?

MIG-I includes households earning between 6 lakh and 12 lakh rupees per year, while MIG-II includes those earning between 12 lakh and 18 lakh rupees per year.

When did this scheme start?

This scheme was launched on January 1, 2017, as a key vertical of Pradhan Mantri Awas Yojana (Urban).

Is the MIG component still open?

No. The MIG vertical was a time-bound scheme and closed for fresh applications on 31 March 2020. The relaunched PMAY-U 2.0 covers EWS and LIG verticals and does not include a separate MIG component.

How was the subsidy received?

The subsidy was channeled through Central Nodal Agencies (CNAs) to the lending bank. The bank then applied this amount directly to the principal loan balance, which lowered the remaining interest and monthly EMI.

Could an unmarried adult apply?

Yes, an earning adult could apply as a separate household, provided they were the sole owner of the property and the loan was in their name.