The Prime Minister house loan scheme in Pakistan is a significant initiative by the Government of Pakistan, executed by the State Bank of Pakistan (SBP) and the Naya Pakistan Housing and Development Authority (NAPHDA), aimed at boosting the housing and construction sector and providing affordable housing to low-to middle-income segments.
This scheme enables commercial banks, Development Finance Institutions (DFIs), and Microfinance Banks to offer financing for housing at very low, subsidized rates.
Scope of Financing and Eligibility Criteria
The MPMG scheme provides flexible financing options and targets first-time homeowners in Pakistan.
Financing Types
Financing availed under the MPMG Scheme can be utilized for:
- Purchasing a house, flat, or apartment.
- Purchasing a plot and undertaking construction on it.
- Extension in a pre-owned housing unit.
- Construction on an already owned plot.
Eligibility Criteria
- Nationality: All Pakistanis with a valid CNIC and NICOP.
- Ownership Status: Must be a first-time house owner.
- Subsidized Benefit: An individual can avail the subsidized house loan facility only once under this scheme.
- NAPHDA Projects: For NAPHDA projects, NAPHDA will shortlist and forward the profiles of eligible candidates to the banks for financing upon the candidate’s request.
Loan Features and Subsidized Rates
The scheme is available in both conventional and Islamic modes and is differentiated by project type and loan amount into specific tiers.
Loan Tenor
The customer can choose a financing tenor ranging from 5 to 20 years.
Loan Types (NAPHDA Projects)
- Financing Limit: Up to Rs. 2.7 million.
- Unit Size: House measuring up to 125 Square Yards (5 Marla) with a maximum covered area of 850 Square Feet.
- Flat/Apartment Size: Maximum covered area of 850 Square Feet.
- Maximum Unit Price: The maximum price (Market Value) of a single housing unit at the time of financing approval shall not exceed Rs. 3.5 million.
Financing Rate (Subsidized Mark-up)
The Government Markup Subsidy Scheme ensures that borrowers pay significantly lower rates for the first 10 years.
| Tier | Borrower’s Charged Financing Rate |
| Tier 1 (NAPHDA Projects) | 3 percent for the first five years, and 5 percent for the next five years. |
| Remaining Tenor | KIBOR + up to 250 bps for the remaining financing tenor (after 10 years). |
Installment Structure (Based on 20-Year Tenor)
The calculated monthly installments are highly competitive, especially in the subsidized period.
| Period | Financing Amount | Tier 0 (Rs. 0.5M) | Tier 1 (Rs. 1M) | Tier 1 (Rs. 2.7M) |
| Year 1 to 5 (3% Rate) | Monthly Installment | Rs. 3,300 | Rs. 5,546 | Rs. 14,974 |
| Year 6 to 10 (5% Rate) | Monthly Installment | Rs. 3,751 | Rs. 6,351 | Rs. 17,147 |
Note: The installments for the period exceeding 10 years will be based on the prevalent KIBOR at that time. An online Installment Calculator is available for detailed estimates, though the actual installments for the period after 10 years may vary.
Required Documentation for Financing
The application process requires different sets of documents based on the applicant’s income source. All applicants must submit the Loan Application Form (LAF), CF Undertaking, Product Disclosure Sheet, and a signed Undertaking for first-time homeowner.
Key Income/Employment Documents
| Formal Salaried Person | Formal Business | Informal Income Person |
| Proof of Employment: Letter/Certificate detailing length of employment. | Business Registration Proof: NTN, Sales Tax Registration (where applicable). | Income Proof: Statement of assets and liabilities. |
| Income Proof: Current Salary Slip or Salary Certificate (max 60 days old). | Business/Account Statements: Last 6 months bank statement (Business/Personal). | Surrogate Income Models: Banks may use specialized models for estimation. |
| Bank Statement: Account Maintenance Certificate with last 6-month Bank statement showing Salary Credits. | Tax Returns: Last 2 years’ tax returns (where applicable). | Personal Guarantee: Banks may accept a personal guarantee of a third party for a maximum period of one (01) year. |
Common Property Documents Required:
- Valid CNIC of applicant & Co-partner.
- Copy of Proof of allotment, transfer, and/or Title Document of the property to be mortgaged.
- Direct Debit Authority (DDA).
SBP Initiatives to Facilitate MPMG Financing
The State Bank of Pakistan has implemented various regulatory and technological measures to create a more conducive environment and speed up the financing process:
- Relaxed DBR: Relaxation of the Debt Burden Ratio (DBR) if the bank relies on a repayment surrogate.
- Informal Income: Banks are exempt from the requirement of verifiable income when using informal income estimation models.
- Standardization: Introduction of a Standardized Loan Application Form, Facility Offer Letter, and Standardized Document Sets for faster approval and disbursement.
- Technological Solutions: Developing advanced Statistical Scorecard Models and technological solutions to acquire data from primary sources (Telcos, Utility Companies) to improve credit assessment for the informal sector.
- Online Portals: Punjab and KPK Governments have launched online portals for banks to verify project approvals.
Complaint Resolution Mechanism (Help Desk & Helpline)
SBP has established a robust mechanism to address complaints and difficulties faced by applicants:
- Online Complaint Management System: SBP has developed a live IT portal for registering complaints, with a maximum resolution time of 8 working days.
- Help Desks: 16 SBP BSC offices across the country have established help desks to assist applicants in registering their complaints via the IT portal, overcoming potential language and technology barriers.
- Helpline: Applicants can contact the dedicated MPMG Helpline for queries or further information: +92 (0) 3377786786.
