The Government’s Mark-up Subsidy Scheme (G-MSS) for Housing Finance, introduced under IH&SMEFD Circular No. 11 of 2020, has undergone revisions to enhance accessibility and alignment with market dynamics. This scheme targets individuals and households in Pakistan who do not currently own a house, offering subsidized housing loans through various tiers and financing options.
Eligibility Criteria for the Housing Finance Scheme
To qualify for the G-MSS:
- Applicants: All men and women holding a CNIC who are applying as first-time homebuyers.
- Restriction: An individual can avail of a subsidized housing loan facility only once under this scheme.
Tiers of the Scheme
The scheme is divided into several tiers based on project types and housing unit specifications:
- Tier 0 (T0): Microfinance banks for non-NAPHDA housing projects.
- Tier 1 (T1): Banks for NAPHDA projects.
- Tier 2 (T2) and Tier 3 (T3): Banks for non-NAPHDA housing projects of varying sizes and specifications.
Size of Housing Finance Unit
Loan sizes are categorized into four tiers based on housing unit dimensions:
- Tier 0 (T0) to Tier 3 (T3): Specified sizes of houses and flats/apartments ranging from 5 Marla to 10 Marla, with varying maximum covered areas.
Age of Housing Units
Newly constructed units within the last year from the application date, except under specified conditions till March 31, 2023, for T0, T2, and T3 tiers.
Maximum Price of Housing Finance Units
- Tier 1 (T1): Capped at Rs. 3.5 million.
- Tier 0 (T0), Tier 2 (T2), and Tier 3 (T3): No maximum price cap.
Maximum Loan Size
- Tier 0 (T0): Up to Rs. 2.0 million.
- Tier 1 (T1): Up to Rs. 2.7 million.
- Tier 2 (T2): Up to Rs. 6.0 million.
- Tier 3 (T3): Up to Rs. 10.0 million.
Loan Type and Tenor
- Loan Type: Long-term housing finance loans.
- Loan Tenor: Minimum of 5 years to a maximum of 20 years, depending on customer choice.
Security Requirements
Housing units financed will be mortgaged as per banks’ credit policies and prudential regulations for housing finance.
Budget Allocation and Pricing
- Subsidy Payment: Managed by the Finance Division, with quarterly payments to banks based on a consolidated subsidy statement.
- Loan Pricing: Varied rates per tier, with initial subsidized rates and subsequent adjustments based on market rates.
Executing Agency and Application Process
- Executing Agencies: All commercial banks, Islamic banks, microfinance banks, and House Building Finance Company Limited (HBFCL).
- Application Form: Standardized form in English and Urdu, requiring essential information with a simplified format and a processing time not exceeding 30 days.
Standardized Procedures and Monitoring
- Loan Documentation: Standardized across banks, with defined risk acceptance criteria.
- Monitoring: SBP publishes quarterly loan information on its website for public awareness.
Geographical Distribution
The scheme covers all regions of Pakistan.
Government’s Mark-up Subsidy Scheme for Housing Finance
What is the Government’s Mark-up Subsidy Scheme (G-MSS) for Housing Finance?
The G-MSS aims to provide subsidized housing loans to individuals and households in Pakistan who do not currently own a house, fostering accessibility to affordable housing through various tiers and financing options.
Who is eligible to apply for the G-MSS?
All men and women holding a CNIC, applying as first-time homebuyers, are eligible under this scheme. An individual can avail of the subsidized housing loan facility only once.
How is the scheme structured in terms of tiers?
The scheme is categorized into different tiers:
- Tier 0 (T0): Microfinance banks for non-NAPHDA housing projects.
- Tier 1 (T1): Banks for NAPHDA projects.
- Tier 2 (T2) and Tier 3 (T3): Banks for non-NAPHDA housing projects of varying sizes and specifications.
What are the size specifications of housing units under the G-MSS?
Housing units are categorized into tiers based on dimensions ranging from 5 Marla to 10 Marla, with varying maximum covered areas depending on the tier.
What are the maximum price caps for housing units under each tier?
- Tier 1 (T1): Capped at Rs. 3.5 million.
- Tier 0 (T0), Tier 2 (T2), and Tier 3 (T3): No maximum price cap.
What are the maximum loan sizes available under each tier?
- Tier 0 (T0): Up to Rs. 2.0 million.
- Tier 1 (T1): Up to Rs. 2.7 million.
- Tier 2 (T2): Up to Rs. 6.0 million.
- Tier 3 (T3): Up to Rs. 10.0 million.
What types of loans are available and what is the loan tenor?
Loans provided are long-term housing finance loans with a tenor ranging from a minimum of 5 years to a maximum of 20 years, based on customer preference.
What are the security requirements for housing units financed under the G-MSS?
Housing units financed will be mortgaged according to banks’ credit policies and prudential regulations governing housing finance.
How is the subsidy payment managed and loan pricing determined?
The Finance Division manages subsidy payments, with quarterly disbursements to banks based on a consolidated subsidy statement. Loan pricing varies per tier, initially subsidized and adjusted subsequently based on prevailing market rates.
Who are the Executing Agencies for the G-MSS, and what is the application process?
Executing Agencies include all commercial banks, Islamic banks, microfinance banks, and the House Building Finance Company Limited (HBFCL). The application process involves a standardized form in English and Urdu, ensuring essential information is submitted in a simplified format and processed within 30 days.
How is the scheme monitored and how is its impact assessed?
Loan documentation is standardized across banks, with defined risk acceptance criteria. SBP publishes quarterly loan information on its website to enhance public awareness and monitor scheme implementation.
Conclusion
The revised Government’s Mark-up Subsidy Scheme for Housing Finance aims to broaden its reach and effectiveness in facilitating affordable housing solutions for eligible individuals and households. It encourages financial inclusion and supports sustainable socio-economic development across Pakistan.
For detailed guidelines and application procedures, interested parties are advised to refer to the latest circular and updates issued by the State Bank of Pakistan.