Govt Launches Mera Ghar Housing Finance Scheme

On Wednesday, the government launched the Mera Ghar – Mera Ashiana housing finance initiative, designed to enhance access to affordable housing for Pakistanis.

According to information on the State Bank of Pakistan (SBP) website, the scheme provides a markup subsidy and risk-sharing mechanism to support eligible citizens in purchasing, constructing, or expanding homes. It targets individuals with valid CNICs who do not currently own a housing unit.

The financing options include loans for acquiring a house or flat, building a house on an owned plot, or purchasing a plot and constructing a house. Eligible housing units encompass houses up to five marla or apartments up to 1,360 square feet.

The loan structure is categorized into two tiers:

• Tier 1: Loans up to Rs 2 million at a fixed end-user rate of 5%.
• Tier 2: Loans from Rs 2 million to Rs 3.5 million at a fixed end-user rate of 8%.

The maximum loan tenor is 20 years, with the markup subsidy applicable for the first 10 years. Borrowers must contribute 10% equity, while banks will finance up to 90%. The loans are priced at 1-year KIBOR + 3%, with no processing charges or prepayment penalties. The government will also provide 10% first-loss coverage on the outstanding portfolio to reduce risks.

Financing is accessible through all commercial, Islamic, and microfinance banks, as well as the House Building Finance Company Limited (HBFCL). The SBP has instructed participating financial institutions to ensure effective dissemination of the scheme and implement safeguards to prevent misuse. Details on markup subsidy disbursement and credit loss coverage will be issued separately by the SBP.