The Presidents/ Chief Executive Officers,
All Islamic Banks and Banks / DFIs having Islamic banking branches

 

Islamic Financing Facility for Low Cost Housing for Special Segments

Dear Sir/Madam,

        In order to facilitate availability of long-term affordable funding to some of the selective low income segments, SBP has launched a “Financing Facility for Low Cost Housing for Special Segments” through IH&SMEFD Circular No. 05 of 2019. In this regard, SBP is also introducing a Mudarabah based “Islamic Financing Facility for Low Cost Housing for Special Segments” (The Facility) for Islamic Banking Institutions (IBIs) and Islamic DFIs; collectively referred as Participating Islamic Financial Institutions (PIFIs). Salient features of the financing facility are as under:

• Participants: All Banks/DFIs
• Financing Amount: Up to Rs. 2.7 million
• Scope:
  • Widows
  • Children of martyrs
  • Special persons
  • Transgender
  • Persons in areas severely affected by terrorism
    
    
• Eligibility of Borrower:
  • First time home owner
  • Must not have availed housing finance previously
  • For construction of a new housing unit
  • Maximum value of the housing unit up to Rs. 3 million
  • The financing for plot to be purchased for constructing house shall be allowed upto Rs. 1.0 million only
    
    
• Financing Tenor: Up to 12½ years

2. Under this facility, Mudarabah investment of SBP shall be available for up to 100% of the amount financed to eligible customers. SBP shall make Mudarabah investment in general pool of the PIFI.

3. PIFIs may submit their requests for allocation / assignment of limits under this facility to be evaluated by SBP as per its internal criteria. Yearly limits shall be allocated to individual PIFI under the Scheme. Applications for sanction of limits for each fiscal year (July-June basis) shall be sent by the interested PIFIs to the Director, Infrastructure, Housing & SME Finance Department, latest by 15th May each year to facilitate sanction of annual limits at the earliest. For the current year, the request for sanction of limits may be submitted within 30 days from the date of issuance of this circular.

4. The Mudarabah investment under the Scheme shall be available for financing sanctioned from the date of issuance of this circular and up-to December 31, 2023. Details of facility, Shariah Structure of the facility and facility documents are provided in the attached Annexures.

Encl:
Annex-I: Islamic Financing Facility for Low Cost Housing for Special Segments

Annex-II: Documents for Islamic Financing Facility for Low Cost Housing for Special Segments