KARACHI: The State Bank of Pakistan (SBP) has unveiled a set of facilitative measures for the borrowers under its affordable housing finance scheme, directing banks to complete credit approvals within two weeks in a bid to expand access to financing and cut delays for prospective borrowers.
According to the SBP under the revised framework, the debt burden ratio has been capped at 65 percent to ensure responsible lending while still allowing greater flexibility for applicants.“Total monthly amortization payments, including the housing finance under consideration and repayment obligations against all other consumer financings, should not exceed 65 percent of the net disposable income of the prospective borrower,” the SBP said.
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The revised policy also simplifies property assessment procedures. Banks and the House Building Finance Company Limited (HBFCL) will now be allowed to conduct in-house valuations for properties with a market value of up to Rs. 5 million. However, properties exceeding this value will require evaluation by at least one valuator from a panel approved by the Pakistan Banks’ Association (PBA), ensuring transparency and standardization in higher-value transactions.
In a bid to enhance efficiency, banks and HBFCL have been directed to complete the credit approval process within a maximum of 15 working days from the receipt of a complete application. This step is aimed at reducing delays that have traditionally slowed down housing finance disbursement.
“Banks/HBFCL shall not take more than 15 working days for the credit approval process (from the date of receipt of application under the scheme along with complete information)”, the circular said.
Additionally, certain prudential regulations related to housing finance, specifically HF-3 and HF-7, have been relaxed to the extent required under the program, providing further operational ease to financial institutions.
Banks and HBFCL have been instructed to ensure strict compliance with these guidelines, as the government looks to accelerate housing finance uptake and support the broader objective of promoting home ownership in the country.
Copyright Business Recorder, 2026
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