SBP’s Strict Order to Banks Will Make Housing Loans Easier

The State Bank of Pakistan (SBP) has instructed banks and the House Building Finance Company Limited (HBFCL) to introduce a faster approval mechanism for applications submitted under the government’s housing finance scheme.

According to an SBP circular, banks and HBFCL must complete the credit approval process within 15 working days from the date a complete application is received under the scheme.

To accelerate processing, the central bank has also relaxed property valuation requirements.

Banks and HBFCL have been allowed to use their internal assessment mechanisms for properties with a market value of up to Rs. 5 million.

For properties valued above Rs. 5 million, valuation must be carried out by at least one appraiser from the Pakistan Banks’ Association (PBA) approved panel.

The SBP has also revised eligibility and financing conditions for applicants. Under the updated guidelines, total monthly loan repayments—including housing finance and all other consumer financing obligations—must not exceed 65 percent of the borrower’s net disposable income.

In addition, the government has renamed the housing initiative “Wazir-e-Azam Apna Ghar Program – Ghar Ho Tu Apna,” replacing the earlier title Mera Ghar–Mera Ashiana.

Under the scheme, eligible applicants can obtain financing of up to Rs. 10 million at a subsidized flat rate of 5 percent for purchasing a housing unit or constructing a house on already owned land.

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