KARACHI, Aug 1: The House Building Finance Corporation (HBFC) will launch a house finance scheme for government employees on soft-term basis.

HBFC Managing-Director Sohail Osman Ali told APP here on Friday that the Corporation had finalised procedures for this scheme and it was suggesting the government to allow payment of instalments to the HBFC directly from their salaries.

He said this decision had been taken in line with the announcement in the federal budget 2003-2004 that the government employees would be encouraged to have their own houses.

He said the HBFC had approached the federal government in this regard to simplify the procedures for the payment of instalments from the borrowing employees.

He said the first contact with the federal government was made on June 26.

He pointed out that a senior executive of the HBFC had held a meeting with the Accountant-General of Pakistan in Islamabad this week to discuss the payment procedures.

Mr Sohail Osman Ali said the Corporation would offer loans to government employees on the basis of their salaries. But if they need additional amount, the HBFC could take their commutation as a guarantee for the additional loan, he said.

He pointed out that the mark-up for this loan would be competitive as the federal government would be the guarantor of this loan.

Talking about other housing loan schemes of the organization, he said the mark-up rate for “Ghar Aasaan” and “Shandar Ghar” was fixed at 7 per cent per annum.

“We are also offering loan for house renovation, repair and extension,” he added.

The HBFC chief said that the corporation had allocated Rs2 billion for disbursement this year keeping in view the budget announcements about the housing sector.

The HBFC chief categorically said that there was no penalty on early repayment of loan and mark-up by the client.

He said the corporation was examining the proposal for extending loans under equitable mortgage.

To a question, he said the HBFC was still enjoying a major market share in the housing finance despite entry of commercial banks in the field.

He was of the opinion that the entry of other financial institutions in housing finance schemes had provided choices to borrowers.

Mr Sohail said that high rates of registration was the biggest hurdle, hindering faster growth of housing finance.—APP