Mera Pakistan – Mera Ghar

State Bank of Pakistan has announced the scheme for markup subsidy on Housing Finance, followed by latest IH&SMEFD Circular No. 11 of 2020 dated October 12, 2020 with a view to promote economic development, employment generation and social wellbeing in the country. Mera Pakistan Mera Ghar shall be available to mid and low-income strata of population with access to institutionalized housing finance to meet their housing needs. In order to facilitate the availability of long-term affordable funding for housing, State Bank of Pakistan (SBP) has shared guidelines to introduce a “Mark-up Subsidy Scheme for up to 5 marla, 5 marla and 10 marla” for Home Finance whereby one individual can have subsidized housing loan facility under this scheme only once.

  • Target Market

    • All men/women holding valid CNIC
    • First time home owner
    • Salaried as well as non-salaried individuals can apply
    • One individual can have subsidized house loan facility under this scheme only once
    • 25 to 60 years of age (at the time of maturity should not be more than 60 years in case of salaried and 65 years in case of non-salaried)
    • Having per month net disposable income Minimum Rs.25,000/-
    • There is no requirement of minimum tenure for job/ business of a borrower

  • Product Description

    1) House/Apartment Purchase This type of finance is meant for the first purchase of a newly constructed housing unit or apartment, which is not more than one year older from the date of application.

    2) Construction of House This type of finance is extended to obligors who intend to construct a housing unit on the plot they already own. Further, financing can be both for purchase of land and construction, though it should not breach the prescribed limit

    3) Purchase of Land and Construction of House thereon This type of finance is extended to obligors who need financing for  the purchase of land and construction of a house on this land provided other terms and conditions, including the maximum price of the housing unit and maximum amount of financing are not breached.

  • Key Features

    Type of Facility This will be a long term loan with monthly installments spread over the term of finance, secured through charge creation on the property in favor of the bank.
    Type of Financing
    • House/Apartment Purchase
    • House Construction
    • Purchase of Land and Construction of House
    Tenor of Financing Minimum tenure of the financing under this scheme shall be 10 years. Whereas maximum financing tenure shall be up to 20 years on the choice of the obligor
    Maximum Size of Housing Units Tier 1 (T1) – Housing Units/apartments of up to 125 square yards (up to 5 Marla) with covered area of up to 850 square feet. (NAPHDA) Tier 2 (T2) – Housing Units/apartments of up to 125 square yards (5 Marla) with covered area of up to 850 square feet. Tier 3 (T3) – Housing Units of more than 125 square yards up to 250 square yards (10 Marla) or apartments with covered area from more than 850 square feet to 1,100 square feet.
    Maximum Price of Housing Units Maximum Price (Market Value) of a single housing unit at the time of approval of financing, should be as under:

    • Tier 1 (T1) – Rs. 3.5 Million (NAPHDA)
    • Tier 2 (T2) – Rs. 3.5 Million
    • Tier 3 (T3) – Rs. 6.0 Million
    Amount of Financing The Maximum size of the loan is as follows:

    • Tier 1 (T1) – Rs. 2.7 Million
    • Tier 2 (T2) – Rs. 3.0 Million
    • Tier 3 (T3) – Rs. 5.0 Million
    Monthly Income Minimum Rs.25,000
    Co-Applicant Income Clubbing 100% Clubbed Up to 04 co-applicants are allowed for income clubbing from multiple sources
    Debt Burden Ratio Maximum up to 45%
    Bank Investment Ratio (BIR / LTV)
    • Tier 1 (T1): Maximum up to 90%
    • Tier 2 (T2): Maximum up to 90%
    • Tier 3 (T3): Maximum up to 85%
    Selection of Property Criteria No geographical restriction shall be applicable

    Pricing /

    Subsidy Profit Rate

    Customer Pricing

    Bank Pricing

    Tier 1:      First 5 Years = 5%

                     Next 5 Years = 7%

    1Y KIBOR + 2.5%

    Tier 2:      First 5 Years = 5%

                     Next 5 Years = 7%

    1Y KIBOR + 4%

    Tier 3:      First 5 Years = 7%

                     Next 5 Years = 9%

    1Y KIBOR + 4%

    For loan tenors exceeding 10 years, market rate will be applicable for the period exceeding 10 years.

    Documentation

    Documents in excess of standard checklist of documents shall not be obtained from applicant (the standard checklist is attached as Annexure)

    Notes:-

    • The facility will be offered to the aforementioned target market under Government Mark-up subsidy scheme for Housing Finance.
    • In addition to above, there are some further clarifications related to segment F in FAQs updated by State bank of Pakistan on November 19, 2020 (annexed)
    • Bank’s permanent staff is not eligible to apply under Mera Pakistan Mera Ghar. However; staff on third-party and contractual employees of banks who are below officer grade and are not eligible to avail staff housing finance are eligible under this segment.
    • New house/apartment/flat must not be more than 1 year old from the date of application, as established by Completion Certificate. Where completion certificate is not available, valuation certificate issued by external valuers may be considered
    • Financing is available under the scheme to the borrower at the time of first transfer of title document after completion
    • Minimum financing tenor under the scheme is 10 years
    • In order for house/flat/apartment to be eligible for particular tier, all criteria under that tier has to be met. If any of the criteria exceeds prescribed limits financing will fall under higher tier
    • Both Spouse who are working can apply under this scheme. However, only one of the spouse can avail financing under the scheme
    • The financing tenor is up to 20 years with the flexibility on the choice of the obligor.
    • NRP holding CNIC/SNIC is eligible as main applicant or co-applicant. However, all relevant regulations including Foreign Exchange Regulations are to be adhered.
    • Designated Branches will entertain the prospect obligors whereas Non-designated branches will guide Prospect obligors to their nearest designated branch.