Availability of Low Cost Housing Finance under SBP’s Markup Subsidy programme
Following support of PBA members for an advertising campaign on SBP’s Mark-up, subsidy programme for housing finance from PBA’s platform, PBA initiated a campaign on Low Cost Housing for release on electronic, print and digital media.
The PBA campaign focus:
Focusing on SBP’s Low Cost Housing Finance incentives based on the government’s Naya Pakistan Housing Scheme, affordable housing finance is now possible through commercial banks in Pakistan.
| Particulars | Markup Subsidy Program | ||||||||||||||
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| Eligibility Criteria | i. All men/women holding CNIC ii. First time home owner iii. One individual can have subsidized house loan facility under this scheme only once iv. Only for construction and first purchase of newly constructed affordable housing units |
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| Size of Housing Unit | Size of the loan is segregated into three tiers, as under: i. Tier 1 (T1) - Housing Units/apartments of up to 125 square yards (upto 5 Marla) with covered area of up to 850 square feet. (NAPHDA) ii. Tier 2 (T2) - Housing Units/apartments of up to 125 square yards (5 Marla) with covered area of up to 850 square feet. iii. Tier 3 (T3) - Housing Units of more than 125 square yards up to 250 square yards (10 Marla) or apartments with covered area from more than 850 square feet to 1,100 square feet. |
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| Maximum Price of Housing Units | Maximum Price (Market Value) of a single housing unit at the time of approval of financing, as under: Tier 1 (T1) - Rs 3.5 million Tier 2 (T2) - Rs 3.5 million Tier 3 (T3) - Rs. 6.0 million |
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| Maximum Loan size | Maximum size of the loan of a single housing unit, as under: Tier 1 (T1) - Rs 2.7 million Tier 2 (T2) - Rs 3.0 million Tier 3 (T3) - Rs. 5.0 million |
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| Loan type | Long term housing finance loans | ||||||||||||||
| Loan Tenor | 10/15/20 years, depending upon choice of customers. | ||||||||||||||
| Security Requirements | 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 the subsidy payment to banks. Payment will be made to the banks on submission of quarterly-consolidated subsidy statement as per format prescribed by State Bank of Pakistan. |
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| Pricing |
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| Executing Agency | All commercial banks including Islamic banks and House Building Finance Company Limited (HBFCL) | ||||||||||||||
| Application Form | • A standardized Application Form 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. |
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| Standardized Procedures | Banks to have standardized loan documents and risk acceptance criteria. | ||||||||||||||
| Monitoring | SBP will publish consolidated information about the loans extended under this program for information of the public on quarterly basis on its website. | ||||||||||||||
| Geographical distribution | Whole of Pakistan. | ||||||||||||||