SBP sets 15-day loan approval deadline for housing finance scheme

The State Bank of Pakistan (SBP) has introduced new measures under its affordable housing finance scheme, directing banks to complete loan approvals within 15 working days to reduce delays and expand access.

Under the revised framework, the SBP has capped the debt burden ratio at 65% of a borrower’s net disposable income, covering housing loans and all other consumer financing obligations.

The central bank has also simplified property valuation rules. Banks and the House Building Finance Company Limited (HBFCL) can now conduct in-house valuations for properties valued up to Rs5 million, while higher-value properties must be assessed by a valuator approved by the Pakistan Banks’ Association.

To improve processing efficiency, banks and HBFCL have been instructed to complete credit approvals within 15 working days from the receipt of a complete application.

The SBP has further relaxed certain prudential regulations, including HF-3 and HF-7, to facilitate smoother implementation of the scheme.

Banks and HBFCL have been directed to ensure compliance with the updated guidelines as part of efforts to increase housing finance uptake and support home ownership.