Karnataka Interest Free Home Loan Scheme - Subsidy for Houses in Urban and Rural Areas

Karnataka government runs several housing subsidy schemes through Karnataka Housing Board (KHB) and Rajiv Gandhi Rural Housing Corporation Limited (RGRHCL) to help EWS, LIG and MIG families build or buy a house at low cost. Karnataka Interest Free Home Loan Scheme was first proposed in 2018 as part of the state's Housing For All plan, under which the government offered to pay bank interest on home loans up to Rs 12 lakh in urban areas and Rs 6 lakh in rural areas for 15 years, leaving beneficiaries to repay only the principal amount.

Notice: This 2018 proposal was time bound to a 30 month house construction target and is no longer offered as a separate standalone scheme. Karnataka Housing Board and RGRHCL currently run updated housing subsidy schemes with similar goals, described below.

Karnataka Housing Board Home Loan Subsidy Schemes 2026

Karnataka Housing Board currently offers housing support through more than one scheme, depending on income group and location. Under 1 Lakh Subsidy Scheme, eligible home buyers get Rs 1 lakh support from the state government, which can be used toward the down payment or the loan principal. A separate Free Home Scheme gives up to Rs 3 lakh as a grant for house construction that does not need to be repaid, and beneficiaries can also take an interest-free loan of up to Rs 7 lakh to complete the house.

These state schemes work along with Pradhan Mantri Awas Yojana Urban (PMAY-U), which gives an interest subsidy of up to Rs 2.67 lakh on home loans for EWS and LIG families. Rural applicants can check their construction progress and payment status through RGRHCL Beneficiary Status portal.

Who Can Apply for Karnataka Housing Subsidy Schemes

Eligibility depends on the applicant's annual household income and whether they already own a house. A family that owns a pucca house anywhere in India generally cannot apply again under these schemes.

• Economically Weaker Section (EWS) families with annual household income up to Rs 3 lakh get the highest subsidy and interest support among all categories.
• Low Income Group (LIG) families earning between Rs 3 lakh and Rs 6 lakh a year can apply for a smaller subsidy along with bank loan support.
• Middle Income Group (MIG-I and MIG-II) families earning between Rs 6 lakh and Rs 18 lakh a year get a lower interest subsidy compared to EWS and LIG applicants.

Applicants must be permanent residents of Karnataka and at least 18 years old at the time of application.

Detail	Information
Scheme Name	Karnataka Housing Subsidy and Interest-Free Loan Support
Launched By	Government of Karnataka, through Karnataka Housing Board and RGRHCL
Beneficiaries	EWS, LIG and MIG families in urban and rural Karnataka
Benefit Amount	Up to Rs 3 lakh grant plus up to Rs 7 lakh interest-free loan; PMAY-U subsidy up to Rs 2.67 lakh
Application Mode	Online through KHB or Ashraya portal, or offline at Gram Panchayat/Municipality office
Official Website	khb.karnataka.gov.in/english

How to Apply for Karnataka Home Loan Subsidy

Applicants can apply online through Karnataka Housing Board or Ashraya portal, or submit their form offline at the nearest Gram Panchayat or Municipality office. Steps for the online application are given below.

STEP 1 - Go to Karnataka Housing Board's official website at khb.karnataka.gov.in/english, or the Ashraya portal at ashraya.karnataka.gov.in for rural housing schemes.

STEP 2 - Look for the housing scheme or subsidy application link on the homepage and click on it to open the online form.

STEP 3 - Fill in personal details, income category, address and bank account information, then upload required documents such as Aadhaar card, income certificate and land or property papers.

STEP 4 - Submit the form and note down the application or reference number to track status later.

Documents Required

Keep these documents ready before starting the application, since most portals ask for scanned copies during the online process itself.

• Aadhaar card for identity and address proof of the applicant and family members.
• Income certificate issued by the competent authority to confirm the applicant's income category.
• Property or land documents, including khata certificate where applicable.
• Bank passbook copy for direct transfer of subsidy or loan interest amount.

FAQ's

Is Karnataka Interest Free Home Loan Scheme from 2018 still active?

No, that specific proposal was linked to a 30 month house construction target and is not offered as a standalone scheme now. Karnataka Housing Board and RGRHCL run updated subsidy schemes with similar benefits for eligible families.

How much subsidy can eligible families get under current Karnataka housing schemes?

Depending on the scheme, families can get up to Rs 3 lakh as a construction grant, up to Rs 7 lakh as an interest-free loan, or a PMAY-U interest subsidy of up to Rs 2.67 lakh on their home loan.

Where can rural applicants check their housing scheme status?

Rural applicants under RGRHCL schemes can check beneficiary and construction status on ashraya.karnataka.gov.in using their application or beneficiary ID.