ISLAMABAD – The federal government has launched a new housing finance scheme to support middle and low-income families in buying or building homes.
The scheme, called “Mera Ghar — Mera Ashiana,” was announced in a circular issued by the State Bank of Pakistan (SBP) to commercial banks, House Building Finance Corporation (HBFCL), and microfinance banks (MFBs).
The program has been introduced as property prices in cities have gone up steadily over the years. In Karachi, for instance, even a small house now costs around Rs10 million, which has made it difficult for many people to own a home. This rise in prices is linked to speculative investment and unregulated market activity over the past decade.
Loan Facility Up to Rs3.5 Million
The scheme provides financing for three purposes:
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Buying a house or flat
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Constructing a house on an existing plot
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Purchasing a plot and building a house on it
The facility covers houses of up to 5 marlas or flats/apartments with an area of up to 1,360 square feet (120 square yards).
Two loan tiers have been introduced:
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Tier 1: Loans up to Rs2 million
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Tier 2: Loans between Rs2 million and Rs3.5 million
The repayment period is up to 20 years, with a markup subsidy provided for the first 10 years.
The interest rate will be based on the one-year Karachi Interbank Offered Rate (KIBOR) plus a 3% margin. Banks will not charge any processing fees or penalties for early repayment.
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Eligibility Criteria
Applicants must meet the following conditions:
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Be Pakistani citizens with a valid CNIC
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Be first-time homebuyers
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Not own any housing unit in their name
The loan-to-value ratio is 90:10, which means the applicant will provide 10% of the cost while the remaining 90% will be financed through the loan. The government will cover 10% of the outstanding portfolio risk on a first-loss basis.
Markup rates have been set at 5% for Tier 1 and 8% for Tier 2 to make repayment manageable.
Role of Banks and Financial Institutions
The SBP has instructed all commercial banks, Islamic banks, MFBs, and HBFCL to offer this scheme and share its details with the public through their branches and other communication channels.
The central bank will issue further instructions on how markup and credit loss subsidies will be managed.
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Main Features of Mera Ghar — Mera Ashiana
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Loan Amount: Up to Rs3.5 million
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Property Size: Houses up to 5 marlas or flats up to 1,360 sq. ft.
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Tenure: Maximum 20 years
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Subsidy Period: First 10 years
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Pricing: One-year KIBOR + 3%
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No processing fee or early repayment penalty
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Risk Coverage: Government to cover 10% of portfolio risk on a first-loss basis
The government aims to increase access to housing finance and provide an opportunity for people who do not already own a home to purchase or build one through formal financing channels.
SBP Issues Guidelines and Details about Mera Ghar – Mera Ashiana
| Parameters | Features |
|---|---|
| Eligibility Criteria | – First-time homeowners who are citizens of Pakistan holding valid CNICs. – Must not own any housing unit in their name. |
| Scope | – Purchase of house/flat. – Construction of house on an already owned plot. – Purchase of plot and construction of house. |
| Size of Housing Unit | – House up to 5 Marlas. – Flat/Apartment up to 1,360 sq. ft. |
| Participating Financial Institutions (PFIs) | – All commercial banks. – Islamic banks. – Microfinance banks (MFBs). – House Building Finance Corporation (HBFCL). |
| Maximum Loan Size | – Tier 1 (T1): Up to Rs2.0 million. – Tier 2 (T2): Above Rs2.0 million and up to Rs3.5 million. |
| Maximum Loan Tenor | – 20 years (markup subsidy available for first 10 years). |
| Bank Pricing | – One-Year KIBOR + 3% |
| Customer/End User Fixed Pricing | – Tier 1: 5% – Tier 2: 8% |
| Bank Charges | – No processing cost. – No prepayment penalty. |
| Loan-to-Value (LTV) Ratio | – 90:10 (90% loan and 10% equity). |
| Risk Coverage | – 10% of the outstanding portfolio under the scheme on a first-loss basis. |
