The government is taking significant steps to make homeownership easier and more affordable for the public. In a recent meeting chaired by Hafiz Mian M. Nauman, the Convener at Naya Pakistan Housing Development Authority (NAPHDA), major recommendations were finalized to provide better financing options for housing projects.
One of the key decisions is to establish an Apex Housing Finance Institution that will oversee and improve access to housing loans. The meeting also focused on reducing policy rates to single digits, which will lower the borrowing costs for individuals and banks. Fixed-term loans for 5, 10, and 20 years are also being planned to provide more flexibility to borrowers.
To support affordable housing, the government is considering bringing back the markup subsidy for low-cost homes. Mortgage bonds are also being introduced as an easy way to get financing for housing needs. Additionally, the role of microfinance institutions (MFIs) will be expanded to cater to low-income groups.
To address challenges like loan defaults, the government is working on strengthening foreclosure laws to make enforcement easier, including property evictions in case of non-payment. The end-user financing model is also being encouraged for apartment projects to allow buyers to access loans tailored to their needs.
Another critical recommendation is for banks to reserve at least 10% of their private-sector credit for the housing and construction industry. A robust risk management framework will also be developed to minimize risks associated with mortgage financing. This includes using insurance and other tools to safeguard both borrowers and lenders.
Efforts will also be made to raise awareness about housing loans and educate the public through financial literacy campaigns. Innovative loan products will be launched to suit all income levels, such as housing microfinance, subsidized rental housing, and fixed-rate mortgages. For first-time homebuyers, equity loans will be introduced. Other ideas include green mortgages, buy-to-let loans for rental properties, and offset mortgages linked to savings accounts.
The government plans to work closely with real estate developers to offer mortgage financing options to buyers. Digital mortgage platforms using blockchain technology will be developed to make loan applications more secure and transparent. Fintech companies will also be encouraged to create innovative financing solutions, and the capacity of banks in handling mortgage financing will be strengthened.
Dr. Faisal Shafaat, a representative from the State Bank of Pakistan, highlighted the current mortgage landscape. He shared that Rs. 233 billion has been disbursed in mortgage financing so far, with Rs. 93 billion given under the Mera Pakistan Mera Ghar Scheme for low-income groups. He also discussed the challenges faced due to IMF policies and recommended relaxing the policy rate to make housing loans more accessible.
These initiatives are expected to make it easier for people to buy homes and support the development of the housing sector across the country. With improved access to financing and innovative solutions, the government aims to make homeownership a reality for many.
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