SBP Sets 15-Day Deadline for Housing Loan Approvals

The State Bank of Pakistan (SBP) has rolled out revised measures under its affordable housing finance scheme, mandating banks to finalize loan approvals within 15 working days in a bid to minimize processing delays and improve accessibility.

As part of the updated framework, the SBP has set a cap on the debt burden ratio at 65% of a borrower’s net disposable income, encompassing both housing finance and other consumer loan obligations.

The central bank has also streamlined property valuation requirements. Financial institutions, including the House Building Finance Company Limited (HBFCL), are now permitted to carry out internal valuations for properties valued up to Rs5 million, while properties exceeding this threshold must be evaluated by valuators approved by the Pakistan Banks’ Association.

To enhance operational efficiency, banks and HBFCL have been directed to ensure that credit decisions are completed within 15 working days from the submission of a complete application.

Additionally, the SBP has eased certain prudential regulations, specifically HF-3 and HF-7, to support smoother execution of the housing finance initiative.

Banks and HBFCL are required to adhere to the revised guidelines as part of broader efforts to boost housing finance penetration and facilitate increased home ownership across the country.