In light of the need to enhance the provision of sufficient housing in the nation and the critical role played by the construction industry in boosting economic activity in other countries, the Pakistani government plans to increase the number of housing units by a factor of ten in the coming years. It has already taken a couple of moves in this direction.

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The State Bank of Pakistan has adopted many initiatives to support the availability of housing and construction financing since July 2020 to support the Government of Pakistan’s plan. The Pakistani government introduced the Government Markup Subsidy Scheme, presently known as Mera Pakistan Mera Ghar (MPMG) markup subsidy Scheme, in October 2020 to supplement these efforts. In March 2021, the government liberalized parts of the MPMG plan in response to stakeholder comments to benefit the greater strata.

This plan, accessible in both conventional and Islamic forms, allows banks to provide funding for the development and purchase of homes at very cheap interest rates for low and middle-income people.

The State Bank of Pakistan, in collaboration with the Government of Pakistan and the Naya Pakistan Housing and Development Authority (NAPHDA), is the project’s executing partner.

Type of Financing:

The MPMG Scheme can be used to finance the purchase of:

  • a house, flat, or apartment.
  • Purchasing a plot of land and building on it.
  • Expansion of a previously owned home.
  • Building on a property that is already owned.

What are the Eligibility Criteria?

  • All Pakistanis, with valid CNIC and NICOP.
  • First-time house owner.
  • This scheme only allows one person to take out a subsidized home loan at a time.
  • For Naya Pakistan Housing and Development Authority (NAPHDA) projects, NAPHDA would shortlist eligible candidates and, upon their request, transmit their profiles to banks for financing

Available Types of Loan:

Following types of loans can be availed:

  • This category allows you to borrow up to Rs. 2.7 million.
  • Houses sized up to 125 sq yards (5 Marla) with a maximal covered space of 850 square feet are eligible for financing.
  • It will be possible to finance a flat/apartment with a maximum defined area of 850 square feet.
  • The top price (Market Value) of an individual housing unit when approving financing must not exceed Rs. 3.5 million to be eligible under MPMG.
  • This scheme allows you to get up to 10 million in financing.
  • The amount of financing is determined by the size of the residential unit.
  • A house size up to 5 Marla (125 Square Yards) and a flat/apartment measuring up to 1,250 Square Feet can be financed for up to Rs. 6 million.
  • Financing of up to Rs. 10 million is available for a house ranging up to 10 Marla (250 Square Yards) and a flat/apartment measuring up to 2,000 Square Feet.

Required Documents:

The documents are required in the following forms:


Loan Application Form (LAF) with undertaking of CF.Original.
Product Disclosure Sheet.Original.
Applicant’s and co- partner’s CNIC must be valid (where applicable).Copy.
Two passport size color photographs of applicant & Co-partner (where applicable).Original.
Undertaking for first-time homeowner.Original.
The property to be mortgaged must have evidence of allotment, transfer, and/or Title Document.Copy.
Employer’s certificate stating that payroll account maintenance would be continued with the lending bank and Direct Debit Authority (DDA) (where applicable).Original.
Proof of employment (together with the period of work) for instance: Employment letter/Employment Certificate/Any valid documentary evidence from the Employer.Original/Copy.
Documentation of Income (salary breakup and deductions to be mentioned) for example: Current Salary SlipSalary CertificateAccount Maintenance Certificate and the most recent 6-month bank statement with Salary Credits are required.    Original/Copy. Original. Original.

Initiative to Promote Financing by SBP:

  1. To create a favorable regulatory environment, the State Bank has implemented several regulatory measures, some of which are given below:
  2. Relaxation of the DBR if banks depend on repayment surrogates to extend credit
  3. Banks will be excused from the need for verified income only if they adopt informal income estimation methodologies.
  4. Banks/DFIs are permitted to prolong low-cost housing credit for a maximum of one (01) year against the personal guarantee of a third party.
  5. A loan application form, that is standardized.
  6. A letter of offer for a facility that is standard.
  7. For financing approval, a standard set of documentation is required.
  8. A standardized set of property documents is necessary for funding disbursement.
  9. The Punjab government’s online verification gateway for banks.
  10. An online platform for Punjab and KPK that lists authorized projects.
  • The Government Markup Subsidy Scheme’s online complaint management system has been launched:
  • SBP created and launched an online complaint management system.
  • The maximum period for resolving a complaint is eight working days.
  • For complaint resolution, banks have designated a focus person in each region.
  • Every SBP BSC office is involved.

Read more about Capital Smart City.

  • Use a standardized income proxy model established by banks to make it easier for consumers with sporadic income to get a mortgage
  • Advanced Statistical Scorecard Model for Housing Finance Development and Implementation:
  •  They encourage banks to establish an effective statistical scoring model to ensure proper housing finance flow to those working in the informal sector.
  • Develop technical solutions for obtaining primary data (telcos, utility companies, government entities, and so on) to transform the traditional credit approval procedure into a scorecard and behavior pattern analysis.

Author bio

Hamna Siddiqui is a content writer for Sigma Properties. She loves traveling with a great fashion sense, and you will see the reflection of her creativity in her writing. With marketing majors, Hamna understands the details of the niche.