Many people in Pakistan are suffering from housing unaffordability even after allocating a major portion of their income on housing however homeownership going to become reality now. The government of Pakistan has launched its Low-Cost Housing (Affordable Housing Loan) Finance Program with the aim of providing people with affordable housing loans and help them make their dreams come true.
This program will facilitate people with easy and suitable options to meet building and buying a new home at a reasonable cost.
The main feature of this program is that it is not for a particular class of people, companies, or groups of companies.
Any citizen of Pakistan may apply for the Low-Cost Housing with the exception being that the applicant has to be a first-time owner, meaning that a person only has a single chance to subsidize from this scheme.
Read: 264 Housing Schemes in RDA’s Administered Area Are Illegal
Markup Subsidy
There are three categories of the markup subsidy that will be available through all banks:
- The unit/plots which are part of Naya Pakistan Housing & Developing Authority (NAPHDA) with size 125sq.yards with covered area up to 850 sq. feet (5 Marla) loan will be granted up to 2.7 Million with a rate of 5% mark-up subsidy for the first five years and 7% for next five years. The total amount of the plot/unit will be a 3.5million, the bank will finance the above, and reaming appropriate amount share will be paid by the borrower.
- The unit/plot which is not part of Naya Pakistan Housing & Developing Authority (Non- NAPHDA) with size 125sq.yards with covered area up to 850 sq. feet (5 Marla) loan will be granted up to 3.0 million with a rate of 5% mark-up subsidy for the first five years and 7% for next five years. The total amount of the plot/unit will be a 3.5million, the bank will finance the above, and reaming appropriate amount share will be paid by the borrower.
- The unit /plot Non- NAPHDA with Size more than 125sq.yards to 250sq.yard with covered area up to 1100 sq. feet (10Marla) loan will be granted up to 5.0million with a rate of 7% mark-up subsidy for the first five years and 9% for next five years. The total amount of the plot/unit will be a 6.0million, the bank will finance the above, and reaming appropriate amount share will be paid by the borrower.
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Loan return tenure
The loan return tenure will be up to twenty years and it’s up to the borrowers to choose their feasible time duration.
The banks also minimize the requirement of observing Debt Burden Ratio (DBR) in the case of Low-Cost Housing Finance, where banks are using repayment surrogates like rent, utility bills, telecommunications bills, etc. to assess the repayment capacity of borrowers.
Eligibility Criteria
- All men/women holding CNIC (including Non-Resident of Pakistan)
- First time homeowner, one unit per household
- One individual can have a subsidized house loan facility under this scheme only once
- Minimum monthly income required: PRK 25000/-
- Minimum 3 years of proof of business for business individuals and 2 years proof for SEP (Self-Employee Professional)
- Minimum 2 years employment periods for Salaries.
Product Variant
- Construction
- First Purchase of newly constructed housing unit i.e. first transfer of title document
- Purchase of plot and construction thereupon
- Expansion / Extension of the existing house
Required Document for applying Low-Cost Housing Scheme:
- Loan application form
- Product disclosure sheet
- Valid CNIC
- Passport size colored photographs
- Direct debit authority
- Proof of Business verified documents
- Income assessment and all sort of bills copy
- Income estimation sheet
- Bureau reports
Age limit (Applicant or Co-Applicant)
Minimum 25 years of age and maximum 60 years.
This facility will be provided with the administrative support of the State Bank of Pakistan as an executing partner with the government of Pakistan and Naya Pakistan Housing and Development Authority.
More than twenty banks like Askri Bank, Bank of Punjab, Meezan Bank, Al-Falah Bank, HBL, MCB, Allied Bank, Summit Bank, Habib Metro Bank, U Micro Finance Bank, etc are providing loans under this scheme.
But many people are unaware of the procedure to apply for Low-Cost Housing Finance. Some are confused that it would be hectic like the usual bank’s loan procedures.
Anyone who wants to acquire this loan can contact us on our portal our team will facilitate and assist you in this regard.
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