The government on Wednesday launched a new housing finance initiative called “Mera Ghar, Mera Aashiana”, aimed at making home ownership easier for low-income citizens.
According to details available on the State Bank of Pakistan (SBP) website, the scheme offers markup subsidies and a risk-sharing mechanism to make housing finance more accessible. It is targeted at citizens who hold a valid CNIC (National Identity Card) and do not already own a residential unit in their name.
Under this scheme, eligible borrowers can obtain financing for
- Purchasing a house or flat
- Constructing a house
- Constructing on an already-owned plot
- Buying a plot along with construction
Eligible housing units include houses up to 5 marla and apartments up to 1,360 square feet.
Financing will be available through all commercial banks, Islamic banks, microfinance banks, and the House Building Finance Company Limited (HBFCL).
The loan structure is divided into two tiers
- Tier 1: Loans up to PKR 2 million at a fixed markup rate of 5%
- Tier 2: Loans between PKR 2 million and PKR 3.5 million at a fixed markup rate of 8%
The maximum loan tenure is 20 years, with a markup subsidy applicable for the first 10 years. Borrowers are required to contribute 10% equity, while banks will finance up to 90% of the property value.
According to the SBP, banks will set interest rates based on 1-year KIBOR + 3%, with no processing charges or prepayment penalties. To reduce risks, the government will provide a 10% first-loss cover on the outstanding portfolio under the scheme.
In a circular, the SBP directed Participating Financial Institutions (PFIs) to promote the scheme using their branch networks and other channels, ensure their systems are prepared for smooth implementation, and prevent potential misuse.
The SBP also said that further details regarding the markup subsidy mechanism and credit loss coverage will be communicated separately.
How to apply
- You can apply through participating banks.
- Each bank may have its own specific requirements.
