3. Introduction of MPMG
PRs of Housing Finance
Working Process of Islamic &
Conventional Banks
SBP Initiatives
Evaluation of MPMG
Suggestions
Conclusion
TeamIntroduction with
Various Topics
4. Special Thanks
to
Mr. Saad Ali Bhatti Sahab
“Thank you for your enthusiasm and guidance throughout the
course. Your words have helped us to build our confidence
and realize that we can do anything we set our minds to. ”
8. Govt of PTI (Oct-2020)
MESSAGE FROM
PRIME MINISTER
IMRAN KHAN
aya Pakistan Housing Program is a flagship initiative of our
government. As a measure of socio-economic uplift, this
program aims at providing much-needed housing facilities to
all citizens, particularly focusing on the underprivileged and
middle-income segments of society. Naya Pakistan Housing and
Development Authority (NAPHDA) were created to realize this
initiative. It is a big challenge because, unfortunately, housing
for the low and middle-income people was never given due
attention in the past.
N
9. TARIQ BASHIR CHEEMA
Minister for Housing and Works
The present government has adopted a visionary approach for
developing the housing sector to address the issue holistically, as
directly or indirectly, almost 42 other industries are ancillary to the
construction sector.
Naya Pakistan Housing Program with a view to creating an enabling
environment for the rising needs of housing units. Shortage rate is 31%
It is a two-tier program focused on restructuring the existing housing-
specific organizations through the establishment of a separate Authority
with the title “Naya Pakistan Housing Authority.” Simultaneously the
policy has also provided financial assistance through Mortgage Housing
Scheme by the Banks and Financial Institutions of the country to finance
low-cost and affordable housing on easy terms.
10. BACKGROUND
• Increasing demand for low-cost and
affordable housing.
• The task force also includes affordable housing
and slums regeneration experts and 21 experts in
the housing and housing finance sector.
Punjab
Sindh
Balouchistan & Gilgit Baltistan
KPK
The housing has been started in the
following regions:
15. Regulation HF 1: Minimum Requirements
Regulation HF 2: Types of Housing Finance
Regulation HF 3: Debt Burden Ratio
Regulation HF 4: Loan to Value Ratio
Regulation HF 5: Limit on Exposure against Real Estate Sector
Regulation HF 6: Financing Tenor
Housing Finance Prudential Regulations
01
03
05
02
04
06
16. Regulation HF 7: Property Assessment
Regulation HF 8: Creation of Mortgage
Regulation HF 9: General Reserve against Housing Finance
Regulation HF 10: Classification and Provisioning
Regulation HF 11: Rescheduling/Restructuring of Non-Performing
Housing Finance
Housing Finance Prudential Regulations
4
07
09
11
08
10
17. Regulation HF 1: Minimum Requirements
Title Documents
• All title and ownership related property documents
• Verified the documents (Advisor)
• Provide one set of copy to Customer
MIS and Reporting
• Strong IT infrastructure
• Effective and efficient monitoring
• Maintain Financial Transactions
• Record Borrower Personal Information
• Type of loan, Business, schedule of
payments
Information to Borrowers
• Written notification of any change
• Statement of accounts
• Payments confirmation
• No hidden charges
Confidentiality of Information
• Unknown (No right to share)
• Authorized Person (Share )
• Overall credit policy
• Assign Authorities & Responsibilities
• Eligibility criteria, Specify Limit
• Payment Schedule
Promotion and Development
Risk Management and Internal Control
• Ensure strict policies and procedures
• In Supervision of Board of Directors
• Specify security requirements
• Risk management framework
Development of Financing Documentation
• Prepare standardized set of financing and recourse documents
• Obtain the thumb impression
• Term & conditions in Urdu language
• Provide one set of copy to Customer
House Financing Policy
• Develop floating, fixed and hybrid rate
• Increasing the areas and branches
• Develop strategies Measures
improving delivery channels
18. Credit Information
• ECIB
• Market Review
• Personal Perception
Asset Liability
Mismatches
• Mismatch of Assets & Liabilities
• Liquidity Risk
• Insufficient Funds
Monitoring of
Housing Finance
Market
• Set mechanism
• Market condition { D & S }
• Market Rates
Insurance/Takaful
• To secure the financing
• Customer bear the insurance expenses
Recovery
Procedures
• Recovery of Finance ordinance (2001)
• Land-mark Judgment (2018)
• Right to sell the property
• With in 3-months
Conti…
19. Regulation HF 2: Types of Housing Finance
• Purchase
• Construction
• Renovation
• Individuals
• Co-borrowers
• on-resident
Pakistanis.
Solar loan facility
• Fall in Renovation loan
• Bank charge
hypothecation
Facilities to Borrower
• Right to change the bank
• If both banks Agree
• After 18-months possible
• 2ⁿᵈ bank no right to change
the mark-up rate
20. REGULATION HF 3: DEBT BURDEN RATIO
DBR ?
SBP's Current Regulation
DBR is an assessment tool to calculate the financial muscle of an applicant,
their capacity to repay their financial obligations in terms of already availed
consumer financing from banks.
DBR ratio shall not exceed above 40% of the applicant’s total disposal
income.
Liability / Income*100
7500 / 20000 *100 = 37.5%
Formula =
21. REGULATION HF 4:
LOAN TO VALUE RATIO
Regulation
LTV= Loan amount/ Asset value
The housing finance shall be provided at a maximum
Loan to Value ratio of 80:20.
Loan amount is 80000.
Security value is 100000.
Security Margin is 20%.
22. Regulation HF 5: Limit on
Exposure against Real Estate Sector
Never more than 10% of advances and investing in
the real estate sector
For the purpose of this regulation, Real Estate Sector shall
include;
• Individual/Families, self occupation &Renting
• Builders, developers, contractors
• Subsidies
• Debt instruments
More than 10% of advances only on cash flow basis.
1.
2.
3.
4. Infrastructure Project Financing (IPF) not include in these
guidelines.
But the Govt program base
projects can exist.
23. Regulation HF 6:
Financing Tenor
• Financing Policies (DFIS/ Banks)
• Not more than 25 years
• Set tenor according to borrower's maturity profile ,
assets & liabilities.
• long time period- high interest
• The restructuring & rescheduling terms & conditions
period not more than 25 years.
24. Regulation HF 7:
Property Assessment
Proper property
valuation
Valuation report
A valuer on approved panel of Pakistan
Banks Association and evaluate according to
standards.
An in-depth assessment of the property
Upto 10million
&
Above 10million
26. Percentage of
Classified Housing
Finance to Total
Housing Finance
General Reserve
(percent of Active/
Performing Housing
Finance
Portfolio)
Below 5% 0.5
Below 10% 1.0
Up to and above 10% 1.5
Regulation HF 09: General Reserve against Housing Finance
III
27. After 2-Year (Loss)
After 90-Days
After 180-Days
After 1-Year(Doubtful)
Same Treatment
Income in
Memorandum account
50% - Liquids Assets
Regulation HF 10: Classification and Provisioning
No Provisioning
Default Notice Issue
Provisioning
• 25% - Liquid Assets
• 75% -FSV
Provisioning
Income in
Memorandum account
Income in
Memorandum account
Provisioning
• 75% -FSV 1st Year
• 50% -FSV 2nd Year
• 30% -FSV 3rd Year
No Treatment
Treatment
Same Treatment
28. CEO/BOD
Approved policies for
Rescheduling/
restructuring
Repayment capacity
• DBR of borrower not more
than 40%.
• If DBR is 50% , borrower
not applicable for
rescheduling/restructuring
Not Avoid Classification
The
rescheduling/restructuring
not more than once within
two years.
4
5
2
3
Regulation HF 11:
Rescheduling/Restructur
ing of Non-Performing
Housing Finance
Tenor
• Financing tenor not
more than 25-years.
• Rescheduling/restruct
uring tenor not more
than 2-years
START
1
Never change Classification
• 10% cash
• 6th installments of
Rescheduling/restructuring
terms & conditions
If the Borrower Defaults
• Downgrade the
classification based on
their own internal
policies.
6
29. Q1
01
Q2
02
Q3
03
Q1
05
State bank has taken various regulatory measures to create
conducive regulatory environment
SBP Initiatives to Promote
Financing under MPMG
Relaxation of DBR in case bank
depend on repayment substitute for
extension of financing
Housing Finance against
personal guarantee to 3rd party
maximum 1-year.
Standardized loan application
form
Standardized set of property
documents required
Q4
04
Standardized set of documents
required for financing approval
Q1
06
Development of technological
solutions
To improve the traditional credit
approval process to a scorecard and
behavior pattern analysis
30. Launch of online complaint
management system
SBP developed an online complaint management
system and made it live
Complaint resolution time is maximum 8 working
days
Banks have nominated a focal person in each
region for complaint resolution
All SBP, BSC(Banking Services Corporations)
offices are also involved
Govt Markup Subsidy scheme
37. One individual can have
subsidized house loan
facility under this scheme
only for once
Eligibility Criteria
NAPHDA will shortlist the
eligible candidate and
upon request of candidate
First time house owner
All Pakistanis with valid
CNIC and NICOP
39. Loan Types
Two types of loan can be availed:
1#For NAPHDA Projects
2#For Non- NAPHDA Projects
1#For NAPHDA Projects
• Up to Rs. 2.7 million can be financed under
this category
• Financing is available for house measuring up
to 125 Square Yards (5 Marla)
2#For Non- NAPHDA Projects
• Microfinance banks can provide up to
Rs. 2 million financing to eligible
borrowers
From Commercial
Banks/DFIs:
• Financing of up to Rs. 10 Million can be availed under this
scheme
• Up to Rs. 6 Million financing can be availed for a house
measuring up to 5 Marla
• For a house measuring up to 10 Marla
From Microfinance Banks:
40. FINANCING RATE
Tier 1: Borrower will be charged financing rate of
• 3 percent for first five years
• 5 percent for next five years
• KIBOR + up to 250 bps for the remaining financing tenor
1#For NAPHDA Projects
42. Tier 0 Tier 1 Tier 2 Tier 3
Financing
Amount
Installment
Financing
Amount
Installment
Financing
Amount
Installment
Financing
Amount
Installment
Monthly
installment from year 1 to 5
Rs.0.5
Million
3,300 Rs. 1 Million 5,546 Rs. 1 Million 6,600 Rs. 6 Million 46,518
Rs. 1 Million 6,600 Rs. 2 Million 11,092 Rs. 3 Million 19,799 Rs. 8 Million 62,024
Rs. 2 Million 13,199
Rs. 2.7
Million
14,974 Rs. 6 Million 39,597
Rs. 10
Million
77,530
INSTALLMENTS
43. Monthly
installment from year 6 to 10
Rs. 0.5
Million
3,751 Rs. 1 Million 6,351 Rs. 1 Million 7,501 Rs. 6 Million 52,492
Rs. 1 Million 7,501 Rs. 2 Million 12,702 Rs. 3 Million 22,503 Rs. 8 Million 69,990
Rs. 2 Million 15,002
Rs. 2.7
Million
17,147 Rs. 6 Million 45,007
Rs. 10
Million
87,487
INSTALLMENTS
• The installments have been calculated on the basis of financing tenor of 20 years. Installments for the
period exceeding 10 years will be based on prevalent KIBOR at that time as per the conditions of
scheme.
44. 2-Color Passport Size Pictures
& Co-partner's Pictures
PROOF OF EMPLOYMENT
Employment letter, any certificate
DOCUMENTS FORMAL SALARIED PERSON
• Proof of allotment
• Transfer and/or Title Document of the property to be mortgaged
LAF with CF Undertaking (Original)
Product Disclosure Sheet
Valid CNIC of applicant & Co-partner
(where applicable)
PROOF OF INCOME
Current Salary Slip
Account Maintenance Certificate along with last 6-month Bank statement with
Salary Credits
47. Meezan Bank – Mera
Pakistan Mera Ghar
Easy Home – Low Cost Housing Finance Scheme offers
convenient and affordable options to fulfill your needs to
construct and first purchase newly built affordable housing
units in a completely Shariah-compliant way using
Diminishing Musharaka mode of financing.
48. Home Owner Housing Finance Facility
individual avail this only
once.
Basic Eligibility Criteria
Citizenship
Unit to be Financed
All Pakistani
nationals holding
CNIC
First time home owner, one
unit per household
Only for construction and first purchase
of newly constructed affordable housing
units
Collateral Security
Requirement
NAPHDA Projects:
Trust will be responsible for the
title documents.
Non -NAPHDA Projects:
As per Banks’ credit policy and
prudential regulations
49. Type of
Charges Salaried Businessmen
Processing
Charges
PKR 8,000 PKR 8,000
FED on
Processing 16%
PKR 1,280 PKR 1,280
Legal Report
Charges
At Actual At Actual
Property
Valuation Charges
At Actual At Actual
Income
Estimation Charges
N/A At Actual
PROCESSING CHARGES
50. Key Qualification Criteria
18
Allowable Financing Cities
All cities of Pakistan where Meezan Bank has it
branch network
Age of Applicant / Co-applicant
Minimum Age 25 Years Maximum Age 60
Monthly Income
Minimum PKR 25,000/- per month net
disposable income
Employment / Business Tenor
Minimum employment / business
tenure: 5 years
Debt Burden Ratio
Maximum upto 45%
54. ALFALAH GHAR ASAAN: MERA
PAKISTAN MERA GHAR LOAN –
BANK ALFALAH
Alfalah Ghar Asaan applications are being accepted by Bank Alfalah providing
low-interest loan under Mera Pakistan Mera Ghar for the construction and
purchase of newly constructed low-cost housing under the Naya Pakistan
Housing Programme (NPHP)
55. ALFALAH GHAR ASAAN
creative portfolio
Here we cover all information regarding Alfalah Ghar Asaan (Mera Pakistan Mera Ghar) application process through Bank
Alfalah to help you get a quick and easy loan on affordable monthly installments.
Product Variants
Key Qualification Criteria
Basic Eligibility Criteria
Documents
Subsidized Mark-up/ Profit
Security Requirement
56. ALFALAH GHAR
ASAAN
QUALIFICATIO
N CRITERIA
Build a Home
Proof of income
documents
First time home
owner
Approved map from the
concerned authority
Mortgage-able
Transferable
Up to 4 co-
applicants
PRODUCT
VARIANTS DOCUMENTS
ELIGIBILITY
CRITERIA
SECURITY
REQUIREMENT
Home Buy Facility Application Form
CNIC copy of the applicant
/ co-applicant
Copies of property documents
/ details of property
PKR 25,000
Per month net disposable
income
CNIC / NICOP /
SNIC
Avail Facility
One-time
Property should
be Accessible
Non-Salaried
Individual
25 -65Years
Salaried Individual
25 -60Years
60. KPK
The land identification process has been initiated along with
reviewing its acquisition process for the housing program.
Baluchistan and Gilgit/Baltistan
A few housing projects have been announced by Federal
Government Employees Housing Authority (FGEHA).
Progress till
now
Punjab:
Projects have been announced in Okara, Lodhran, Bahawalnagar,
Faisalabad, Sialkot, Chistian, Chiniot, and Jhelum.
Sindh
The housing scheme is under progress in the Sindh province.
Since the launch of the scheme, applications of Rs276.14 billion under MPMG have
been received by banks and with approval worth Rs117.13 billion up till
December 31, 2021.
61. Role in Economic
Growth & Benefits
Poverty
reduction
Employment
Opportunities
Better Educational
Outcomes
Increase in Tax and
Revenue
Sustainable
Infrastructure
63. Weaknesses and Hindrances
Slow Loaning Process The pressure of SBP on
commercial banks
Highly dependent on a
strong mortgage market
Increased Cost of
Construction
64.
65. Why has Govt suspended ‘Mera
Pakistan, Mera Ghar' housing
project?(July to August)
• Former prime minister Imran Khan had approved Rs100 billion for the 'Mera
Pakistan, Mera Ghar' initiative.
• A couple of days earlier, Finance Minister Miftah Ismail said that the government
was re-shaping the scheme and no one will lose their money.
66.
67. “The government will continue with the MPMG housing loan scheme
for all those whose loan applications have been approved and who
have been paid advances (bayana).” Finance Minister Miftah Ismail
said on Twitter.
68. Suggestions
Break the norms of housing policies
Tax Relaxation on Housing
01
Subsidized cost to the eligible
Direct Govt Role
03
Urban planning reforms
New Sub-Urban Towns
02
Develop Land Record System(Increase
Ownership)
Increase Land Supply
04