For the first time in the history of Pakistan, State Bank of Pakistan has launched Roshan Apna Ghar, an exclusive product for Non Resident Pakistanis (NRPs) and Pakistani Origin Card (POC) holders to digitally and remotely buy a property, build or renovate a house in Pakistan through their own investment or bank financing.

The financing is available in both conventional and Shariah compliant variants at very attractive rates for a period of three to twenty five years. The end to end digital process and simplified mechanism makes it a convenient and fast process for Overseas Pakistanis to obtain housing finance or invest in Pakistan’s real estate sector.

The NRPs interested in investing or obtaining financing for properties in pre-approved projects, will have even faster processing of their investment or housing finance request. Investments made in Pakistan through RDAs are fully repatriable and subject to full and final taxation.

NRPs can also obtain financing from banks in Pakistan at attractive financing rates in conventional or Shariah Compliant versions. The financing under Roshan Apna Ghar can be availed against self-selected properties as well as from list of projects available at banks’ websites. The applicant can select the property before applying for the loan or after the approval of financing limit by the bank based on applicant’s cash flows and repayment capacity.

Lien Based Financing: The NRPs can obtain house finance facility against lien on their RDA deposit balances or Naya Pakistan Certificates. Banks can finance up to 99% of the property value for purchase or construction of house; for renovation of house, financing is capped up to 40% of the property value. No mortgage of property, equitable or registered, is required against lien based financing facility. The borrower will sign all the financing documents digitally, physical presence is not mandatory even for execution of sale or transfer deed. The borrower will however, nominate any person in Pakistan to complete the sale or purchase formalities and get the property transferred in the borrower’s name.

Non-Lien Based Financing: This is normal housing finance offered against mortgage of the property to be purchased; banks fund up to 85% of the property value for purchase or construction of house, and up to 30% of the property value for renovation of house. While the borrower will digitally sign the financing documents, his or her physical presence or power of attorney in favor of any person in Pakistan is required for obtaining the property’s title documents from Registrar etc. and creating the bank’s charge on the property. The banks will provide the soft copy of the Special Power of Attorney (SPA) to the borrowers for down loading, printing, signing, getting it attested by Pakistan Mission in the country of residence of the borrower and sending the same to the attorney. Pakistan Missions and Foreign office in Pakistan has made special arrangements for attesting the SPAs of RDA holders on priority.

The house financing facility under GMSS is also available for RDA holders under Roshan Apna Ghar product as per the already defined criteria under respective tiers. In this case the financing rates applicable to Government mark-up subsidy scheme would apply.

Insurance of the property, up to the extent of financing amount, is free. Moreover, free credit risk coverage up to the outstanding amount of financing is offered by select banks.

Off plan financing is extended for under construction projects. The builders or developers after the requisite regulatory approvals offer houses, apartments etc. for sale on installment plans. The borrowers seek financing from banks to partly finance the down payment or periodic installments to be paid to the builder or developer. This financing is generally called off plan financing.

Some of the RDA participating banks have made arrangements for off plan financing of selected pre-approved projects. This would cater to the financing needs of NRPs interested in acquiring an under construction or development property. This financing among others also require a tripartite agreement between the bank, the builder and the borrower to explicitly define the terms and conditions of the financing, the roles and responsibilities of the builder, bank and the borrower, the estimated completion time, the penalties etc. in case of delays etc. The off plan financing arrangements may differ from bank to bank and builder to builder.