Govt Launches Mera Ghar Mera Ashiana Scheme
Pakistan has launched ‘Mera Ghar Mera Ashiana’ on Wednesday to provide affordable housing to the masses.
Under this scheme, the low-income people will be provided with subsidized loans, risk-sharing support, and long-term financing options.
The State Bank of Pakistan (SBP) announced the scheme on Wednesday, emphasizing that it is designed for citizens holding valid CNICs who do not already own a house.
Read More: How To Get Home Loan in Pakistan
According to the official details shared by SBP, the scheme ‘Mera Ghar Mera Ashiana’ on Wednesday provides financing for the purchase of a house or apartment, construction on an existing plot, or the combined purchase of land and construction of a house.
Read More: KP Interest Free Home Loan Scheme
Eligibility Criteria
The people are eligible for houses up to five marla and apartments of up to 1,360 square feet. This is a size bracket typically sought by first-time homebuyers.
The government has announced plans to provide financing through all commercial banks, Islamic banks, microfinance institutions, and the House Building Finance Company Limited (HBFCL).
Loan Structure
The SBP has divided the loan structure into two categories to cater to varying borrower needs.
Under Tier 1, the people can get loans of up to Rs2 million at a fixed end-user rate of 5%. Tier 2 covers loans over Rs2 million and up to Rs3.5 million, with a fixed end-user rate of 8%.
The tenor for both categories has been extended up to 20 years.The government subsidy will apply for the first 10 years. Borrowers will have to provide 10% of equity.The banks will finance up to 90% of the property’s value.
The government will provide a 10% first-loss guarantee on the outstanding loan portfolio in order to mitigate risks for financial institutions.
This mechanism may encourage banks to expand lending in the housing sector. The SBP has made it clear that the banks would set loan pricing at one-year KIBOR plus 3%. There will be no processing fees or penalties for early repayment to ensure flexibility for borrowers.
In its circular, the central bank has also directed Participating Financial Institutions (PFIs) to raise awareness relating to the scheme through their branch networks.
The SBP also directed banks to take initiatives to facilitate the consumers and guard against potential misuse of the scheme. The bank will communicate a disbursement mechanism for markup subsidies and credit loss coverage later.
