Housing construction plays important role in economic development by contributing in GDP growth, employment generation and social well-being. Further more than 40 industries and 70 percent of unskilled labor are linked with housing and construction sector.
in order to provide formal financial services at affordable rates, Government of Pakistan is providing Markup Subsidy for Housing Finance. The features of the Facility approved by the Government are given below…
1)All men/women holding CNIC.
2) First time home owner.
3)One individual can have subsidized house loan facility under this scheme only once.
4)Only for construction and first purchase of newly constructed affordable housing units.
Size of Housing Unit
there are three Tier or levels as under
1) Tier 1 (T1)-Housing Units/apartments of up to 125 square yards( Up to 5 Marla) with covered area of up to 850 square feet NAPHDA
2)Tier 2(T2)-Housing units/apartments of up to 125 square yards (5 Marla) with covered area of up to 850 square feet.
3) Tier 3 (T3)- housing units of more than 125 Squire yards up to 250 squire yards (10 Marla) or apartments with covered area from more then 850 Square feet to 1100 Square feet.
Maximum price of Housing Units
Maximum price of (Market value)of single housing unit at the time of approval of financing as under
1)Tier 1 (T1)-Rs. 3.5 million
2)Tier 2 (T2)-Rs. 3.5 million
3)Tier 3 (T3)-Rs. 5.0 million
Maximum Loan size
Maximum size of the loan of a single housing unit, as under Loan type.
long term housing finance loan
10/15/20 years, depending upon choice of customers
As per banks credit policy and prudential regulations for housing finance, the housing unit financed will be mortgaged in favor of financing bank.
Allocation in budget.
Finance Division shall give authority to SBP to debit GOP account on quarterly basis for subsidy statement as per format prescribed by state Bank of Pakistan.
Pricing For House Loans
Loan Tier or levels …Customer pricing
T 1. 5% for first 5 years 7% for next 5 years
T 2. as same above
T 3. 7% for first 5 years 9% next 5 years.
For loan tenors exceeding 10 years, Market rates will be applicable for the period exceeding 10 years.
All commercial banks including Islamic banks and Housing Building Finance company limited..
A standardized Application both in English and Urdu will require minimum essential information with simple format.
The processing time will not exceed 30 days after submission of all documents by the borrower and the same will be clearly stated in the application form.
Banks to have standardized loan documents and risk acceptance criteria.
SBP will publish consolidated information about the loans extended under this program for information of the public on quarterly basis on its website.
Banks can also avail risk coverage against the housing finance under the scheme from Pakistan Mortgage Refinance Company at mutually agreeable terms and conditions.
The banks are advised to ensure successful implementation of this facility through dissemination of necessary instructions to branches/regions and capacity building of field staff, development/alignment of financing products and marketing campaigns.