All through our lives, we work day and night so that we can live peaceful and comfortable lives. But what good is that life, when you constantly have to move around and keep investing in a rental space? Why do you want to stay in a vicious cycle of nagging landlords and ever-increasing rental prices?
Understanding this need and dream of many Pakistanis to own their home, the Government of Pakistan in collaboration with the State Bank of Pakistan has introduced a housing finance scheme by the name of “Mera Pakistan Mera Ghar”.
Mera Pakistan Mera Ghar – Overview
Mera Pakistan Mera Ghar is a long term housing finance scheme guided by the Shariah principles of diminishing musharakah. This specific scheme was introduced as a low cost housing finance scheme for the nation. There are many banks that provide various home loans in Pakistan; however, for this scheme SBP has collaborated with every bank in the country.
For the ones who are unfamiliar with the term ‘diminishing musharakah’; let us tell you that it starts as a joint partnership, but ends with complete ownership of one partner. The share of a party is divided into units. These units are purchased by the other party periodically, until complete ownership is established.
Speaking in terms of this housing scheme, an individual seeking partnership would collaborate with the bank, to own an asset, that is, a house, while the share of the bank will be divided into units.
Before we take a deep dive into the offerings and tiers of the scheme, let us tell you the basic features of this low income housing scheme:
- Subsidised Markup Rate
- Financing up to PKR 10 million
- Easy Documentation
- No charges on early payment
- Quick processing
- Available for up to 20 years
Mera Ghar Mera Pakistan, also known as Apna Ghar Loan Scheme allows the interested individuals to apply for the loan if they wish to:
- Buy a home
- Buy a plot and construct a house
- Construct a house
- Expansion of existing house
If you are an individual wishing to do any of the above mentioned activities, you can apply for this loan, however, if you are looking to just renovate your home, this scheme would not be able to facilitate you.
Tiers of the Scheme
The requirement for every individual varies, when it comes to buying a house. For example, person 1 looks for a house of up to 125 sq yards, while person 2 wishes to buy an apartment of 1000 sq yards. It would be useless to present the two of them to opt for the same loan. Thus the Government of Pakistan has divided this scheme into four separate tiers, based on the scheme they are financed under, the size and age of the housing unit and the minimum and maximum loan size.
This tier of the scheme will be provided through microfinance banks, under the non-NAPHDA (Naya Pakistan Housing and Development Authority). Under tier 0, you can construct or buy a house of up to 125 sq yards (5 Marla) or an apartment that covers a total area of 1,250 sq yards.
There is no limit to the maximum price of a housing unit, however in this tier you can only apply for a loan of maximum Rs. 2.0 million.
You can easily apply for a tier 1 loan from any bank under NAPHDA project, for a house of up to 125 sq yards, or an apartment that covers the maximum area of 850 sq feet. This tier will be applicable on newly constructed housing units during the last one year from the date of application.
The maximum price a housing unit, under this tier can reach is Rs. 3.5 million, while the maximum loan size you can apply for is Rs. 2.7 million.
Tier 2 can be financed through any commercial bank under non-NAPHDA. Under this tier, you can get a house of up to 125 sq yards and an apartment covering the maximum area of 1,250 sq feet financed.
The maximum price of the housing unit is not defined; however, the maximum loan size is PKR 6.0 million.
Similar to tier 2, tier 3 can also be financed through commercial banks under non-NAPHDA projects. An individual looking for a house of up to 250 sq yards (10 Marla) or an apartment covering a maximum area of 2,000 sq feet, can apply for tier 3.
The government of Pakistan has not defined any limits for the maximum price of a residence; however, there is a limit to the amount of the loan that is PKR 10.0 million.
As per the online portal of SBP (State Bank of Pakistan), there are only three requirements that an individual must fulfill in order to apply for a loan:
- Any men/ women with a valid CNIC
- First time home owner
- The individual has not uitilised this scheme before
Apart from these three requirements, there are certain other criterion that an individual must possess, however, that is dependent on the tier selected and the bank chosen.
The period in which an individual can return the amount of loan can be chosen by the individual themselves, however the State Bank of Pakistan (SBP) has made it clear that the chosen period cannot be less than 5 years and not more than 20 years.
The individuals choosing different tiers will be given with different pricing plans. The plans are as follows:
|Tier Category||Customer Pricing||Bank Pricing|
|Tier 0||5% for the first five years&7% for the next five years||KIBOR + 700 BPS|
|Tier 1||3% for the first five years&7% for the next five years||KIBOR + 250 BPS|
|Tier 2||5% for the first five years&7% for the next five years||KIBOR + 400 BPS(spread can differ)|
|Tier 3||5% for the first five years&9% for the next five years||KIBOR + 400 BPS(spread can differ)|
*KIBOR = Karachi Interbank Offered Rates
*BPS = Basis Points
If the period of the loan exceeds the first ten years, the market rate that is the bank pricing will be applied, for the next five years.
Procedure of Application & Documents Required
The procedure and the documents required may vary slightly as per the bank and the tier of the loan you wish to apply for. Thus in order to apply for the apna ghar loan scheme, visit the bank you wish to collaborate with or visit their website and download the application form.
Mera Pakistan Mera Ghar – FAQs
Here are some of the most commonly asked questions about the house financing scheme:
If you are a Pakistani, with a valid CNIC and a first time home-buyer, you can apply for this scheme, given that you haven’t utilised this scheme before.
As per the State Bank of Pakistan, an individual can borrow up to PKR 10 million.
Yes. The scheme allows the interested party to purchase an apartment.
First purchase means the first transfer of the property that is an apartment or house.
Here is a complete list of FAQs related to the Mera Pakistan Mera Ghar, answered by the State Bank of Pakistan.
With this we conclude our blog on the low income housing scheme initiative. We have mentioned everything you must know about this scheme before applying, from the key features to the amount you can be loaned as well as the pricing rates. Once you get your home constructed from the top construction companies in Pakistan, make sure to get it insured as well.
If you have any queries left unanswered, you can write to us at firstname.lastname@example.org.