Subsidised housing finance scheme: banks seen taking applications from people aged up to 65 years

The State Bank of Pakistan (SBP) reported on Wednesday commercial and microfinance banks had been directed that all the citizens having no house in their names were eligible for the Prime Minister’s subsidised housing finance scheme, aiming to overcome the accumulated shortfall of over 10 million housing units in the country.

“Banks are seen taking applications for housing finance from people aged up to 65 years for the PM housing scheme,” SBP Executive Director Islamic Finance Group Ghulam Muhammad Abbasi said while speaking at a workshop on Prime Minister’s housing scheme titled ‘Wazir-e-Adam Apna Ghar Program – Ghar Ho Tu Apna.’

No profession has been marked as a negative profession and/or ineligible profession for the housing finance scheme.

“Journalists, lawyers, judges, policy and army men all are eligible to participate in the scheme to own a house,” he said.

Overseas Pakistanis are also eligible for the scheme.

A maximum of four people can together apply for one loan to meet repayment conditions. Aging people can partner with their children and other family members with the condition they are employed and earning some money. People with monthly pay slips or without pay slips are eligible to apply for – doesn’t matter how much they earn a month.

“We are aimed at providing a house to everyone including people who fall under low-income groups,” Abbasi said.

He said that monthly loan repayments would be capped at 65% of a borrower’s salary, adding that many applicants were believed to have additional sources of income besides their formal salaries.

“We have targeted to disburse a total of 150,000 housing loans in the current fiscal year 2026-27. The government has allocated Rs71 billion for subsidising the loans in the ongoing fiscal year FY27,” he said.

Banks would charge a market-based interest rate on return of loans in the last 10 year of the scheme – if the loan was taken for a maximum period of 20 years, Abbasi informed.

“There is no bank processing free for the loan under the scheme.”

Banks have received a total of 107,000 applications since March 2025, with nearly 80% submitted after September 2025, when the scheme was revised to increase the maximum loan amount to Rs10 million and offer a subsidised interest rate of 5% for the first 10 years of the repayment period.

Out of the received applications, the subsidised housing finance loans have been approved for over 27,000 applicants and rejected 13,000 applications.

“Banks have disbursed over 6,000 loans worth an average size of Rs4.8 million, totaling the disbursed amount at Rs26 billion under the scheme as of June 30, 2026,” he said.

As of June 30, 2026, banks had outstanding housing finance loans of Rs293 billion extended to 65,414 borrowers, translating into an average loan size of about Rs4.5 million.

He said some 70-80% housing finance applications were being submitted online.

The online submission is expected to further increase once a separate and a dedicated online portal is launched soon.

“The government has told banks that it will absorb the first 10% of loan losses of their housing finance portfolios,” he said, adding that the non-performing loan (NPL) ratio for housing finance currently stood at 5.6% in the country.