The government launched a new housing scheme, ‘Mera Ghar – Mera Ashiana’, on Wednesday to promote affordable housing across Pakistan. The initiative targets low- and middle-income citizens who do not own a home. It aims to improve access to housing finance and revive growth in the construction sector. According to the State Bank of Pakistan (SBP), the scheme includes a markup subsidy and risk-sharing support for banks. All citizens with a valid CNIC and no property ownership can apply.
The scheme allows financing for several purposes, including buying a house or flat, building a house, or purchasing a plot and constructing on it. It covers homes up to five marlas and apartments up to 1,360 square feet. Both new and under-construction properties are eligible. All major commercial banks, Islamic banks, microfinance banks, and the House Building Finance Company Limited will offer this financing. This broad participation will help the scheme reach people across the country.
Loans are offered under two fixed-rate tiers to keep repayments affordable. Tier 1 covers loans up to Rs2 million at 5%, while Tier 2 includes loans between Rs2 and 3.5 million at 8%. The maximum loan period is 20 years, making long-term planning easier for borrowers. The government will provide a markup subsidy for the first 10 years, reducing financial pressure early in the loan. Borrowers will contribute 10% equity, while banks cover the remaining 90%.
To make the scheme secure for lenders, the government offers a 10% first-loss guarantee on the loan portfolio. Banks will price loans at 1-year KIBOR + 3%, with no processing charges or penalties for early payment. This encourages borrowers to repay loans without fear of extra costs. SBP has asked banks to train staff and promote the scheme nationwide. Banks must also ensure transparent implementation and prevent misuse.
The SBP said the payment mechanism for subsidies and guarantees will be shared with banks later. This housing plan arrives at a critical time as the real estate sector faces a slowdown. By offering low-cost financing and government-backed guarantees, the scheme could help thousands of families secure a home. It also supports job creation in construction and related industries. The government hopes this move will boost economic activity and address Pakistan’s housing shortage.