SBP revises feature of markup subsidy, risk-sharing scheme for affordable housing finance

The State Bank of Pakistan (SBP) announced changes to the markup subsidy and risk-sharing scheme for affordable housing finance on Tuesday, increasing the maximum loan size to Rs10 million.

According to the updated terms, the maximum loan amount is now Rs10 million for houses up to 10 marla (2,720 square feet) and flats up to 1,500 square feet. The fixed pricing for customers and end-users is set at a flat rate of 5.0 per cent, the SBP said in a circular.

“To ensure uniformity, end-user rate on loans already disbursed under the subject scheme at 8.0 per cent will be adjusted to 5.0 per cent,” the central bank said. Other features of the scheme will remain the same, it added.

The SBP issued this circular following the government’s approval of revisions to certain features of the housing scheme, which aims to promote affordable housing in the country. Under the new framework, the eligibility criteria for the scheme will remain unchanged. The scheme will continue to be available to first-time homeowners who are Pakistani citizens, possess valid CNICs, and do not own any housing units in their name

The scheme provides financing for the purchase of a house or flat, the construction of a house on an already owned plot, as well as the purchase of a plot followed by construction.