The federal government has rolled out a new subsidized housing finance scheme titled “Mera Ghar – Mera Ashiana”, aimed at helping Pakistan’s middle- and lower-income groups achieve homeownership amid a worsening housing affordability crisis.
The scheme was formally announced in a circular issued by the State Bank of Pakistan (SBP) to commercial banks, the Housing Building Finance Corporation, and microfinance banks.
Addressing the Housing Affordability Crisis
Over the past five years, property prices across Pakistan have soared to record highs, with even modest homes in Karachi now costing at least Rs. 10 million. Analysts attribute the surge to unchecked speculative investments and the influx of black money, which has priced out middle-class and low-income families.
Despite this crisis, successive governments have been reluctant to regulate the housing market. Mera Ghar – Mera Ashiana seeks to reverse this trend by extending subsidized home loans of up to Rs. 3.5 million for the purchase or construction of affordable housing.
What the Scheme Covers
Eligible applicants can use financing for:
-
Purchasing a house
-
Constructing a home on an existing plot
-
Buying a plot and building on it
The scheme is limited to residential units of up to five marlas or flats/apartments up to 1,360 sq. ft. (approx. 120 sq. yards).
Loan Tiers and Repayment Terms
The financing is structured into two tiers:
-
Tier-1: Loans up to Rs. 2 million
-
Tier-2: Loans between Rs. 2 million and Rs. 3.5 million
Borrowers will be allowed repayment terms of up to 20 years. To ease the burden, the government will subsidize the markup for the first 10 years.
Interest Rates and Risk Sharing
-
Interest rates are linked to the one-year KIBOR + 3% margin.
-
Banks are prohibited from charging processing fees or prepayment penalties.
-
Fixed pricing: 5% for Tier-1 and 8% for Tier-2.
-
The loan-to-value ratio is set at 90:10, with the government assuming 10% portfolio risk on a first-loss basis.
Eligibility Criteria
To qualify, applicants must:
-
Be Pakistani citizens
-
Be first-time homebuyers
-
Not own property in their name
Safeguards and Implementation
The State Bank of Pakistan has directed participating institutions to:
-
Clearly communicate all scheme details to applicants
-
Establish robust mechanisms to prevent misuse and fraud
-
Implement systems for markup subsidy payments and credit loss coverage (to be detailed later)
Conclusion
The launch of Mera Ghar – Mera Ashiana marks a major government effort to bring affordable housing within reach of Pakistan’s struggling middle- and lower-income groups. By combining long-term subsidized financing with strict eligibility criteria, the scheme seeks to curb speculative pressures and promote sustainable homeownership in the country.
Tags:
Subscribe To Get Update Latest Blog Post
No Credit Card Required
