Regulatory Alerts2026-08-18 | SH&SFD Circular No.04 of 2026 of 2026Added
Revised Prudential Regulations for Housing Finance
These Prudential Regulations for Housing Finance update requirements for banks and Development Finance Institutions (DFIs) regarding eligible purposes, underwriting standards, and security arrangements. They establish a maximum Loan-to-Value (LTV) ratio of 90:10, a debt-burden ratio not exceeding 65% of net disposable income, and a maximum financing tenor of 30 years for housing finance, or 10 years for renewable-energy solutions. For housing finance up to PKR 5 million, banks and DFIs may secure loans by marking a lien on the property or using a Green Property Certificate, while finance exceeding PKR 10 million requires assessment by a PBA-approved valuator. The regulations also detail asset classification and provisioning based on overdue periods, and specify conditions for rescheduling or restructuring housing finance, including a limit of once per two-year period and requirements for declassification.