The federal government has set a target of 125,000 home loans worth Rs700 billion for the current year, sharply raising the ambition of its housing finance programme as applications from low- and middle-income families continue to pour in.
The target, announced on Wednesday, will be pursued under the Wazir-e-Azam Apna Ghar programme, the federal scheme that offers subsidised loans to Pakistanis buying or building their first homes. It marks a steep climb from the scheme’s original first-year target of 50,000 houses backed by Rs321 billion.
A much bigger ask from banks: government home loans Pakistan
At the programme’s launch in Islamabad in April, Prime Minister Shehbaz Sharif had told banks to clear 50,000 housing cases in the first year, with Rs321 billion earmarked for the purpose. Over five years, the government plans to finance 500,000 housing units with an allocation of Rs3.2 trillion.
The new Rs700 billion figure more than doubles that first-year ambition, and reflects the scale of demand. By early September, the programme had received 147,504 applications, of which 53,127 were approved with a combined value of Rs313.42 billion. Banks had disbursed Rs45.43 billion to 8,739 applicants by that point, and the pipeline has kept growing since.
How the scheme works
Under the programme, any participating bank can lend a first-time buyer or builder up to Rs10 million. The markup is fixed at 5 per cent for the first 10 years, well below commercial rates, and the repayment period stretches to 20 years to keep monthly instalments affordable.
The loans are open to Pakistani citizens with a valid CNIC and a clean credit history. Salaried workers, small business owners and professionals such as doctors and engineers can all apply, provided they have not defaulted on an earlier bank loan.
The property itself must meet size limits aimed at keeping the scheme focused on affordable housing: borrowers can use the loan for a plot or house of up to 10 marlas, or for an apartment with a covered area of up to 1,500 square feet.
Why the government is pushing hard
During a recent review of the Access to Finance Plan 2026-2028, the prime minister directed provincial chief secretaries to survey properties that banks could finance under the Apna Ghar programme, so that eligible families are not blocked by documentation hurdles.
The State Bank of Pakistan has also loosened its prudential rules for housing finance. Under the revised framework, banks can lend up to 90 per cent of a property’s value, apply a 65 per cent debt-burden ratio, and use new procedures to assess informal income, which opens the door to borrowers without a salaried payslip.
Parliament has backed the push with the Financial Institutions (Recovery of Finances) Amendment Act 2026, strengthening the legal framework for recovering and enforcing mortgage loans. Officials say the law gives banks more confidence to lend for housing.
The test will be disbursement
Approvals are rising, but the real measure is money reaching borrowers. Disbursements jumped about 59 per cent between June and August, yet only a fraction of approved applicants had received funds by mid-August. Housing finance in Pakistan remains thin, and the 125,000-loan target will test whether banks can shift from paperwork to payouts at a pace the government has never demanded of them before.
FAQs
Who is eligible for the Apna Ghar home loans?
Pakistani citizens buying or building their first home, with a valid CNIC and a clean credit history. The scheme covers salaried workers, small business owners and professionals.
What is the maximum loan and the interest rate under the scheme?
Borrowers can take up to Rs10 million, with the markup fixed at 5 per cent for the first 10 years and a repayment period of up to 20 years.
What property sizes does the scheme cover?
Loans can be used for a plot or house of up to 10 marlas, or an apartment of up to 1,500 square feet.
How has the scheme performed so far?
By early September, the programme had received 147,504 applications and approved 53,127 of them, with Rs45.43 billion disbursed to 8,739 borrowers.
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Originally reported by propakistani.pk.
