Rising property prices and expensive financing have made it increasingly difficult for many Pakistanis to own a home. It is a big relief for low- and middle-income families. Commercial banks have approved housing loans of Rs160 billion under the Prime Minister’s Wazir-e-Azam Apna Ghar Program and disbursement of loans has started.

The announcement was made by Adviser to the Finance Minister Adnan Pasha, during the First International Insurance Conference in Karachi. The initiative, he said, is aimed at meeting Pakistan’s housing shortage of close to 10 million units by making home ownership more affordable through subsidised financing.

Who Can Apply?

The scheme is for low- and middle-income families who want to buy, build or renovate a house.

Applicants must generally:

• Pakistani nationals with valid CNIC.
• Have a regular income.
• Fulfill the eligibility and repayment requirements of the participating commercial banks.
• Submit the required financial and property-related documents.

How to Apply?

Eligible persons can apply through any of the participating commercial banks of Pakistan. The applicants have to submit their CNIC, income proof, bank statements and documents of property. The bank examines the application and if found fit, sanctions the loan on concessional terms under the scheme.

How Much Loan Can You Get?

The government said banks have approved a total of Rs160 billion in housing loans but did not set a cap on maximum loan amounts per applicant. The amount of financing is based on the applicant’s income, repayment ability and the value of the property. Successful applicants would be able to avail the loans for purchase/ construction/ renovation of house at concessional markup rate of only 5 percent.

To encourage lending, the government is underwriting up to 10 percent of potential loan losses for banks and providing a 10-year markup subsidy, making financing more accessible.

But Pasha said the scheme does not have a home insurance component at the moment, leaving borrowers exposed to risk such as floods and earthquakes. He also called on the insurance sector to devise affordable insurance products to strengthen the initiative.

Officials believe the PM Housing Scheme will help thousands of families achieve homeownership while addressing Pakistan's long-term housing shortage through affordable and accessible financing.

Credit: Independent News Pakistan (INP)