By Moaaz Manzoor

The federal government has set an ambitious target to finance 500,000 housing units over the next four years under the Prime Minister Apna Ghar Programme (PM-AGP), with the overall markup subsidy volume projected at Rs3.2 trillion, according to official documents available with Wealth Pakistan. The scheme, approved by the Ministry of Housing and Works, aims to improve access to affordable housing finance for low and middle-income groups while also stimulating construction-related economic activity.

Documents show the Federal Cabinet revised key features of the programme on March 4, 2026, following directives from the Prime Minister’s Office to enhance loan limits, expand housing coverage, and increase the scale of financing. The revised framework was later notified by the State Bank of Pakistan (SBP) on March 17, 2026. Under the approved structure, the scheme is available for first-time homeowners holding Pakistani CNICs who do not already own any housing property.

Financing can be obtained for the purchase or construction of houses, flats, or plots, including construction on already-owned land. The maximum house size eligible under the scheme has been capped at 10 marlas (2,720 square feet), while flats up to 1,500 square feet can also qualify for financing. According to the documents, the maximum loan size has been fixed at Rs10 million with a repayment tenure of 20 years and a subsidy period of 10 years. Participating banks will charge borrowers at One-Year KIBOR plus 3%, while customers themselves will pay a subsidised flat rate of 5%.

The loan-to-value ratio has been set at 90:10, requiring borrowers to contribute 10% equity and 90% loan. Commercial banks, Islamic banks, microfinance banks, and the House Building Finance Company (HBFC) have been included as implementing partners under the scheme. Progress data available up to April 30, 2026, shows the programme received 25,304 applications, out of which 8,990 were approved, while 2,612 were rejected. Another 13,792 applications remain under process.

The documents further reveal that 1,845 loans worth Rs5.071 billion have been disbursed so far, while the overall approved financing volume has reached Rs37.154 billion. To achieve the broader target of 500,000 housing units, the government has outlined phased annual goals, including 50,000 units in FY26, 100,000 units in FY27, 150,000 units in FY28, and 200,000 units in FY29. The documents conclude that large-scale participation by financial institutions will remain critical for expanding housing affordability and sustaining long-term growth in Pakistan’s housing finance sector.

Credit: INP-WealthPk