Frequently Asked Question

A plot of land can only be purchased under the facility if a house into be constructed on the plot and financing is meant both for purchase of land and construction thereon provided all other terms and conditions of the facility including maximum price of house and maximum loan under the relevant tier are complied with.

Subsidy can be claimed during construction period on the actual amount disbursed to end consumer. This period is included in total period of 10 years for which the government is providing subsidy.

Such cases where customer buys under construction property and intends to complete the remaining unit through financing are allowed to be accommodated under G‐MSS. Bank shall ensure that all criteria of G‐MSS as prescribed in IH&SMEFD Circular No. 03 of 2021 dated March 25, 2021 is complied.

In order to establish first time home ownership, financing bank will obtain an undertaking to the same effect from its borrower/customer with necessary provisions for termination of subsidy and other penalties, in case it is established at a later stage, that the borrower/ customer owned a house at the time of application for availing subsidy facility. In case of Tier‐I financing, the cost subsidy will also be recovered in case it is established at a later stage that borrower/customer owned a house at the time of application for availing subsidy facility.

Yes, financing will be available for expansion/extension of existing housing unit provided the housing unit after expansion/extension falls within the criteria specified under the facility.

Financing bank shall obtain undertaking from the borrower that he/she owns the only house against which they are applying financing for expansion/extension. The undertaking must include necessary provisions for termination of subsidy and other penalties, in case it is established, at a later stage, that the borrower/customer owned a second house at the time of application for availing subsidy facility.

No, financing for renovation i.e. improvement in existing housing unit will not be allowed under the facility.

No, bank staff is not eligible under the facility

Yes

Contractual employees of banks who are below officer grade and are not eligible to avail staff housing finance are eligible for financing under the Scheme.

Yes

No. Permanent employees of the bank are not eligible under the scheme.

YNo. Permanent employees of the bank are not eligible under the scheme.

How much income of co‐borrower can be clubbed and how many co‐ borrowers/applicants are allowed?

Yes, financing under G‐MSS may be allowed if co‐ borrower owns a house. However, primary borrower(s) should be first time home owner(s). ‘Primary Borrower’ is the borrower in whose name property title will be transferred.

Home owner will not be allowed to sell the housing unit before expiry of 5 years from the date of acquisition. Further, during this period, he/she will not be allowed to rent out financed housing unit.

The residential units announced by NAPHDA fall under Tier 1 (T1). All other residential units with the same specifications/measurements fall under Tier 2 (T2).

The housing finance under Tier 1 is allowed to the applicants of NAPHDA’s housing units, as confirmed by NAPHDA

Housing units under Tier 3 are required to be greater than 5 Marla but up to 10 Marla.

There is no covered area requirement for a house falling under Tier 0, Tier 2 or Tier 3.

Banks are required to comply with requirements of measuring unit mentioned on title documents of the property being financed. For example, if title document mentions area in marla, financing bank is required to follow marla condition. In case both measuring units are mentioned on the title document, the bank is required to comply with condition which results in eligibility of financing by the applicant under the Scheme

The housing units of up to 5 Marla with financing need above Rs. 6.0 million will be covered under Tier 3 (T3)

There is no price restriction of residential units to be financed under Tiers 0, 2 & 3 under G‐MSS. However, maximum financing shall not exceed as specified in each Tier. For T1, maximum price will be Rs. 3.5 million.

For low cost housing finance, as defined in IH&SMEFD Circular No. 12 of 2020, maximum LTV ratio of 90:10 will apply. For other housing units, maximum LTV ratio of 85:15, as specified in PRs for Housing Finance will apply

Markup Subsidy will be discontinued on categorization of a loan as “Loss”.

The repayment of financing under this Facility will be in equal monthly installments.

In case of early payment, banks will not charge penalty to the customer.

The KIBOR used for pricing will be One Year KIBOR to be reset every year.

The spread mentioned in the scheme for each Tier is the maximum spread. Banks may opt for less spread.

Till March 31, 2021, customer will pay housing finance installment as per prevalent markup rates. However, from 1st April 2021 and onward, banks shall calculate the installment as per revised tiers and markup rates as advised in IH&SMEFD Circular No. 03 dated March 25, 2021.

Yes, the facility can be revised provided that customer complies with all conditions of GMSS and fulfills bank’s own internal risk assessment criteria

The financing banks will not require borrowers to provide documentsin excess ofstandard checklist of documents circulated by Pakistan Banks’ Association.

It is other way round. The financing tenor is up to 20 years with flexibility on the choice of the customer. The customer can opt for any tenor between 5 and 20 years.

Minimum financing tenor under the scheme is five (05) years.

The financing can be extended to an NRP holding CNIC. However, financing bank has to adhere to all relevant regulations including Foreign Exchange Regulations.

Yes, NRPs holding NICOP can also avail financing under ‘Markup Subsidy for Housing Finance’.

There is no regulatory requirement of minimum tenure for Job/ business of a borrower.

Facility can be terminated/paid‐off by borrower at any point in time. Further, financing banks will not charge any prepayment penalty in case of early repayment by the borrower.

There is no such regulatory requirement.

Scheme does not bar such arrangement provided all other Federal/ Provincial Governments’ rules & regulations are observed.

Both spouse can apply. However, only one of the spouse can avail financing under the scheme

What will be applicable KIBOR in case of subsidy claim mechanism?