In a bid to boost affordable housing, the federal government introduced a new Markup Subsidy and Risk Sharing Scheme under the title “Apna Ghar Program: Ghar Hoto Apna” for Affordable Housing Finance.
The scheme covers the purchase of houses, flats, and plots, as well as construction of homes on already owned land. The people can get loans for the housing unit up to 10 Marla or 1500 sq. ft flats. The federal government has announced maximum loan size up to Rs 10 million with flat 5 percent customer/end user fixed pricing.
It may be mentioned here that the loans will be available for a tenor of up to 20 years, with the government offering markup subsidy for the first 10 years. End users will pay a fixed markup of 5 percent, while the bank price will be one-year KIBOR plus 3 percent. As per procedure, no processing costs or prepayment penalties will be charged to customers.
Loans will be provided on a 90:10 Loan-to-Value (LTV) ratio, meaning borrowers will contribute 10 percent equity. The government will also provide risk coverage of 10 percent of the outstanding portfolio under the scheme on a first-loss basis.
All commercial banks, Islamic banks, microfinance banks (MFBs), and the House Building Finance Company Limited (HBFCL) have been designated as participating financial institutions (PFIs).
