Housing projects play a major role in the economic growth of a country by contributing to GDP growth, employment generation, and social welfare. Also, more than 40 industries and 70 percent of unskilled labor are connected with housing and construction zone.

This is why the Prime Minister of Pakistan Mr.Imran Khan has taken a great initiative to facilitate the people of the country with an affordable amazing house loan project. The purpose of this is to provide to Pakistanis living under the meager line of poverty. 

Eligibility Criteria
Size of Housing Unit
Price of Housing Unit
Markup
Executive Agencies
Product Variance
Application Forms
Banks
How to Apply
Key Features & Benefits

Currently, Pakistan’s housing shortage is considered to be around 11 to 12 million. So, the PM has set the firm goal for his government to meet the annual shortage by 1 million per year, 5 million (50 lakhs) in five years of its term.

A tough goal and target indeed, but a tough circumstance requires tougher handling; so, the Prime Minister has designated a very hard, and seemingly unattainable, target to his team and his lieutenants to fight the circumstances with all the possible strength and proclivity, to face the serious situation and achieve the seemingly big target. Prime Minister’s

Task Force is totally prepared to face this situation, and fulfill the target. The Prime Minister Imran Khan himself often says, is in the Hands of Allah Almighty!

The target areas for Prime Minister’s Task Forces to facilitate or make available 10 lacs housing units per year comprises: Rural Areas include 4 lacs units/year, Peri-Urban areas include 2 lacs units/year, Urban Areas include 4 lacs units/year. 

It is very necessary to keep in mind that, in Pakistan, it is for the first time that, the government policymakers in the capital city of Islamabad are dynamically thinking, talking, and designing for housing in rural areas of the country, which is almost 68%, or 2/3 of Pakistan, which have always been conveniently ignored.

In order to offer formal financial services at economic rates, the Government of Pakistan is offering a Markup Subsidy for Housing Finance. The houses are built in three categories:

• Labor Class
• Middle Class
• Lower Middle Class

Eligibility Criteria and Terms for House Finance Scheme in Pakistan

There are certain terms and conditions to be part of this scheme and you have to fall in the given criteria. The eligibility criteria include for this house loan scheme by the Government of Pakistan includes,

1. You can purchase a complete residential property either an Apartment or Flat or House. You can also purchase a plot and construct it immediately and cannot buy only a plot if you don’t have a plan to construct it.
2. All men and women should have CNIC. They can be salaried or non-salaried.
3. They should not be owners of any house.
4. Only for building and first purchase of newly constructed economical housing units.
5. One person can have subsidized house loan aid under this scheme only once.
6. Age must be between 25 to 60 years.
7. For Individual Net Disposable income must be 25,000 to 100,000 per month.
8. For Household Net Disposable Income must be 25,000 to 140,000 per month.
9. Up to 4 co-applicants from a single-family can apply for a house loan from any bank in Pakistan.
10. Collateral Security needs.
11. Minimum 2 years employment period for Salaried.

Size of Housing Unit to Avail Home Finance Scheme by Government of Pakistan:

The size of the loan is separated into three tiers, as under:

Tier 1 (T1) NAPHDA Projects – Housing Units of up to 125 square yards with a covered area of up to 850 square feet (up to 5 Marla).

Tier 2 (T2) Non-NAPHDA Projects – Housing Units of up to 125 square yards with a covered area of up to 850 square feet (5 Marla).

Tier 3 (T3) Non-NAPHDA Projects- Housing Units of more than 125 square yards up to 250 square yards or apartments with covered area from more than 850 square feet to 1,100 square feet (10 Marla).

Maximum Price of Housing Units to Avail House Loan in Pakistan:

Tier 1 (T1) has Rs 3.5 million, Tier 2 (T2) has Rs 3.5 million and Tier 3 (T3) has Rs. 6.0 million.

And the maximum loan size of a single housing unit is Tier 1 (T1) has Rs 2.7 million, Tier 2 (T2) has Rs 3.0 million, and Tier 3 (T3) has Rs. 5.0 million.

Moreover, long-term housing loans are available. They are about 10/15/20 years, according to the choice of the customer. 

Pricing or Markup for House Loan Scheme:

Pricing for housing loans include:

For Tier 1, the customer pricing is 5% for the first 5 years and 7% for the next 5 years with Bank pricing KIBOR+250 BPS.

For Tier 2, the customer pricing is 5% for the first 5 years and 7% for the next 5 years with Bank pricing KIBOR+400 BPS (Spread may vary).

For Tier 3, the customer pricing is 7% for the first 5 years and 9% for the next 5 years with Bank pricing KIBOR+400 BPS (Spread may vary).

Executing Agencies to Get House Loan in Pakistan:

It includes all the commercial banks like Islamic banks and House Building Finance Company Limited (HBFCL). 

Its geographical distribution is whole of the Pakistan. 

Product Variance:

• Building 
• First, buy a new build housing unit i.e. first transfer of title documents.
  (Not more than 1 year old from the date of application as developed by completion certificate). 
• Purchase of plot and building thereupon.
• Expansion / Extension of an existing housing unit

Application Form and Process for Housing Loan in Pakistan 2021:

A standardized application form which may be both in English and Urdu will need minimum important information in a simple format.

The processing time will not surpass 30 days after submission of all documents by the borrower and the same will be surely stated in the application form.

Banks That are Dealing in House Loan Scheme by Pakistan Government

All the major banks that offer home loan facilities for Pakistan real estate are listed below. These are the name of major banks only, otherwise, all commercial banks deal in this Finance Scheme.

• United Bank Limited (UBL).
• Standard Chartered – Home Purchase & Home Credit.
• Muslim Commercial Bank (MCB).
• Bank of Punjab (BOP).
• Meezan Bank Limited.
• HBL (Habib Bank Limited).
• Dubai Islamic Bank (DIB).

All cities are included in PM Home Loan Scheme where the bank has its branch network. 

How you can apply?

1. Get the application form from any bank.
2. Fill in all the mandatory details.
3. Fill it carefully or take the help of a bank representative to completely put information into the form.
4. For income estimation of salaried person salary slip or employee certificate is required. Bank will also check various bank proxy methods.
5. For non-salaried persons bank will check various proxy methods.
6. Submit documents of the plot you own if you want a house loan for construction only.
7. Submit a copy of documents (if you have) for ready to move house if you want home finance for buying that property.
8. Pay processing fee amounting to Rs 4500 (Can Vary Bank to Bank).
9. Submit the application form.
10. Get the receipt.
11. Bank representatives will take few weeks to analyze your application. They can also visit your place to ask people about you in your area.
12. Your application can be approved or not based on the analysis.

Key Features of Pakistan House Loan Scheme:

• Free Life Insurance
• Subsidized Markup Rate
• Financing up to PKR 5 Million
• Available for up to 20 years
• Easy Documentation
• Quick Processing
• No restrictions and no charges on early repayment
• Increase buying power by offering loans of longer tenure fifteen to twenty years.
• Minimize cost by standardizing design and specifications.
• Reduce cost by significantly cutting down the approval time.
• Establish new communities with access to infrastructure.

More Benefits:

This initiative would mean doubling the capacity at least of all building-related industries. It would also mean another one to three hundred thousand jobs in the service industry that is banking, security, maintenance, insurance, etc.

It would also become the jumpstart of the economy as it will be proving to be the biggest growth engine for the economy. The participation in the country’s economy from the housing sector alone, allied industry, and services would be 15 trillion Rupees. (If each unit is valued at 3 million rupees on an average).

This would mean an addition of more than 8 to 9 trillion rupees over 5 years above the recent contribution. This will provide many homeless people a roof to live peacefully.