The State Bank of Pakistan (SBP) has made some allowances in a bid to facilitate applicants looking to avail housing loans under the government’s subsidised scheme.
Currently, the applicants are facing difficulties in obtaining housing finance, especially for low-cost housing, as banks are reluctant to take the risk of the house not being completed or completion of documentation. The completion of housing unit and mortgage creation takes time. In order to address this issue for applicants and banks, the SBP has allowed acceptance of a third-party guarantee for this period up to a maximum of one year.
With the aim to facilitate banks in extending low-cost housing finance, SBP has allowed them to accept personal guarantee of third party until the housing unit is completed and the mortgage is perfected. The guarantee will remain valid for a maximum period of one year. This step will help promote home ownership of potential borrowers wishing to avail housing finance under the government mark-up subsidy scheme issued by the central bank on October 12, 2020.
Published in The Express Tribune, February 16th, 2021.
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SBP has took a wrong decision by allowing thirds party guarantee. No one will be agree to become the third party of the poor man as they will also be reluctant .