PMAY Home Loan Subsidy Scheme 2026 - EWS LIG Interest Subsidy Under PMAY-U 2.0

PMAY Home Loan Subsidy Scheme 2026 for EWS/LIG: Ministry of Housing and Urban Affairs is giving interest subsidy on home loans to Economically Weaker Section (EWS) and Low Income Group (LIG) families through Pradhan Mantri Awas Yojana Urban 2.0 (PMAY-U 2.0). Eligible families can get up to ₹1.80 lakh subsidy on loans used to buy, build or repurchase a house.

Old Credit Linked Subsidy Scheme (CLSS) for EWS/LIG, which gave 6.5% interest subsidy for 20 years, was valid only till 31 March 2022 and stopped taking fresh cases after that. It has been replaced by a new component called Interest Subsidy Scheme (ISS), which covers home loans sanctioned and disbursed on or after 1 September 2024.

PMAY Interest Subsidy Scheme (ISS) for EWS/LIG - Key Details

ISS works differently from the earlier CLSS. Instead of one upfront payment, the subsidy amount gets credited in 5 equal yearly instalments directly into the loan account through Direct Benefit Transfer (DBT). This happens only if the loan is still active and more than half of the principal amount is outstanding at the time of each instalment.

Households with annual income up to ₹9 lakh, taking a loan of up to ₹25 lakh for a house worth up to ₹35 lakh, get a subsidy at 4% on the first ₹8 lakh of the loan, for a tenure up to 12 years. Maximum subsidy release is ₹1.80 lakh, with a Net Present Value cap of ₹1.50 lakh calculated at 8.5% discount rate. Carpet area of the house should not cross 120 square metre.

Eligibility for PMAY EWS/LIG Interest Subsidy

Before applying, families should check whether they fit the income and property conditions set for ISS. Eligibility depends mainly on annual family income, ownership of any earlier pucca house and the property being used for self occupation.

• Annual family income should be up to ₹3 lakh for EWS category and between ₹3 lakh and ₹6 lakh for LIG category (MIG families with income up to ₹9 lakh can also apply under the same ISS component).
• Family, meaning husband, wife and unmarried children, should not already own a pucca house anywhere in India in the name of any member.
• Subsidy applies only to loans sanctioned and disbursed on or after 1 September 2024 for purchase, construction or repurchase of a house, not for loans taken earlier under the old CLSS scheme.
• Loan amount should not cross ₹25 lakh and the property value should not cross ₹35 lakh for the loan to qualify for subsidy.

How Subsidy Amount Gets Calculated

Subsidy is worked out on the first ₹8 lakh of the loan at 4% per year. Full amount, subject to the ₹1.80 lakh cap, is released to the borrower's loan account in 5 equal yearly parts through DBT, not as one upfront credit like the earlier CLSS. Each instalment reduces the outstanding principal, which lowers the future EMI. Borrower keeps paying regular EMI on the balance loan amount as per the bank's lending rate.

How to Apply for PMAY Interest Subsidy Scheme

Application process for ISS runs through the Unified web portal linked to PMAY-U 2.0, and the request then moves to the Primary Lending Institution (PLI), meaning the bank or housing finance company that gave the loan.

STEP 1 - Take a home loan from any bank or housing finance company for purchase, construction or repurchase of a house that meets the income and property conditions of ISS.

STEP 2 - Visit the PMAY-U 2.0 portal at pmaymis.gov.in and register the demand for interest subsidy under the ISS component, along with a self certificate or affidavit of annual income.

STEP 3 - Bank or HFC forwards the application to the concerned Central Nodal Agency after checking eligibility, and once approved, the subsidy gets credited to the loan account in yearly instalments.

STEP 4 - Complete geo tagging of the house through the bank or HFC as required, since this is compulsory before release of instalments for under construction houses.

Documents Required for PMAY EWS/LIG Subsidy

Banks ask for a standard set of papers to check income, identity and property details before forwarding the application for subsidy.

• Aadhaar card and other identity/address proof of the applicant and co-applicant, if any.
• Self certificate or affidavit declaring the annual family income, since separate income proof is not compulsory under ISS.
• Property documents, including sale deed or construction related papers, along with the sanctioned loan documents from the bank.

When Subsidy Will Not Be Given

Certain conditions under ISS guidelines make a person ineligible for the subsidy even if the loan is otherwise sanctioned.

Subsidy is given only once for a property, so a buyer of a resale property already covered under the scheme cannot claim it again. If two or more family members take a joint or separate loan for the same property, they are counted as one family for income and subsidy calculation. Switching the loan to another bank/HFC through balance transfer, without having claimed subsidy from the first lender, also removes eligibility. Any false declaration of income after taking the subsidy can lead to legal action against the borrower.

Difference from Old PMAY CLSS for EWS/LIG

Earlier PMAY home loan scheme under CLSS gave a 6.5% subsidy upfront for loans up to ₹6 lakh, with a maximum tenure of 20 years, but this component closed for fresh applications after 31 March 2022. ISS under PMAY-U 2.0 has a lower subsidy rate of 4% but covers a bigger loan amount of up to ₹25 lakh and spreads the benefit over 5 yearly instalments instead of one lump sum. For checking which banks and housing finance companies currently offer this subsidy, see the updated list of PMAY home loan banks and HFCs.

FAQ's

Is the old PMAY CLSS scheme for EWS/LIG still active?

No. Credit Linked Subsidy Scheme for EWS/LIG stopped taking new cases after 31 March 2022. Current benefit for EWS/LIG families comes through the Interest Subsidy Scheme (ISS) under PMAY-Urban 2.0.

What is the maximum subsidy amount under PMAY-U 2.0 ISS?

Maximum release is ₹1.80 lakh, with an NPV cap of ₹1.50 lakh at 8.5% discount rate, paid in 5 equal yearly instalments through DBT.

Can a person who already took CLSS subsidy earlier apply for ISS again?

No. Subsidy under the scheme is given only once for a property, so a family that already received benefit under the earlier CLSS component for the same house cannot claim ISS again.

Where can eligible families check their application status or apply?

Application and status check both happen through the official PMAY-U 2.0 portal at pmaymis.gov.in, after the bank or HFC forwards the eligible case.