Federal govt to approve financing for 50,000 housing units with Rs100 billion allocation

The federal government is set to approve the financing of 50,000 housing units, with Rs100 billion allocated for the current financial year. The Ministry of Housing and Works will present a summary to the Economic Coordination Committee (ECC) today [Friday], seeking approval for the scheme.

As per reports, the initiative aims to provide first-time house and flat owners with housing finance for up to 20 years, offering subsidised rates for the first 10 years and market rates for the subsequent 10 years. 

The scheme also includes 10% risk coverage of outstanding portfolios for financial institutions under a first-loss basis.

The loan limits are set at a maximum of Rs2 million for Tier 1 and up to Rs3.5 million for Tier II, with a 20-year repayment period. The interest rate will be based on one-year KIBOR plus 3%, with no processing fees and no prepayment penalties. 

The eligible housing units will be up to 5 marla or flats up to 1360 sq. ft, with commercial banks, Islamic banks, MFBs, and HBFCL participating in the scheme.