The government's ‘Mera Pakistan Mera Ghar’ (MPMG) scheme has been a success – at least from the view of response it received from the general public.

Citizens, including myself, have applied for house loans worth Rs473.7 billion under the scheme. The amount approved so far is Rs212.3 billion and disbursement by banks stands at Rs85.3 billion, which means I am now among the 18% of applicants who have been successful.

While the process of applying for the loan and having it approved from the bank was a difficult task, finding a property with clean papers was particularly arduous. Maybe this is particularly troublesome in Karachi.

In Sindh's capital, most properties don’t have papers that banks would be ready to finance. Bankers told me the policy of banks for this scheme has been stringent when compared to housing finance.

Initially, I set an ambitious target – finding a leased plot and constructing a small house on it. However, I soon realised it was a wild goose chase, and that I could only buy a small apartment in the price range I had.

I was told to pay Rs14,000 by the bank when I submitted a copy of property papers of a apartment that I had finalised. The bank took more than a month to do its due diligence – valuation and verification of the property.

By the time I got the go-ahead, the owner of the house, who happened to be a relative, got an offer 10% higher than what I was supposed to buy the house for. The deal was canceled. My deposit of Rs14,000 had gone down the drain.

I then found another property and submitted a copy of property papers but this time, I was more pushy with the bank.

Here again, I submitted Rs14,000 for the verification and valuation process conducted by the banks and the third-party law firm and valuator. However, by now, I had developed a friendship with the bankers who had seen quite enough of me, and did not spend my money on valuation — they wanted to verify the property papers before they moved to valuation.

They were willing to return Rs9,000, marked for valuation and processing purposes, but before the amount could reach my wallet, there was another plan waiting.

The bank rejected this property as well. The argument was that the eight-storey with half a dozen blocks and hundreds of apartments at the heart of Karachi has a case registered against it by the land utilisation department. This was apparently because the builder did not leave proper spaces between the blocks.

By now I had searched at least half of Karachi - Gulistan-e-Jauhar, Gulshan-e-Iqbal, Guru-Mandir, I.I. Chundrigar Road, DHA Phase II, Phase II Extension, Phase IV, Clifton, F.B. Area and PECHS Block 2 – visiting dozens of residences.

Finally, when I was losing hope of finding a house, I surprisingly found something within my range at main Tariq Road — one of Karachi's busiest commercial streets.

During my search, I also realised that prices of smaller apartments were now converging — the area they were located in had little bearing on the rate.

Moreover, the government’s scheme has also pushed up prices for houses below Rs10 million. Property brokers or dealers told me that there were a lot of people like me who are out there with an approved loan looking for a house.

However, many of them say they don’t deal in bank loans because of the bank's fastidiousness towards documents. There are very few properties in Karachi that a bank would mortgage. Pakistan’s housing mortgage-to-GDP ratio is just 0.3%, the lowest in the region, where the average for South Asian countries is 3.4%.

I have seen bankers and government officials citing this stat, arguing that Pakistan has immense potential to expand its mortgage. But the reason is here. There are so many lacunae. From property papers to several bureaucratic hurdles.

I was also forced to pay over Rs100,000 'speed-money' during the process.

My bank’s lawyer also approved all the documents, and the bank also fixed the day for the registry of the property. However, on the eve of the registration, I was told that there was one document missing.

I became nervous since I have already spent nearly Rs1 million, taking loans from friends and family, on the property’s initial payment, taxes and registry fee. The banker dealing with me told me that it was ‘alarming’ if that b-lease copy was not in the document, although its reference was categorically mentioned in the sub-lease. However, there was misprinting in the sublease as well, which is common in property documents, my lawyer told me.

I had to pay Rs20,000 for the copy of a document in the city court’s premises. It was a document, a copy of which was supposed to be attached to all apartments’ property papers in the building. However, it appeared that nobody in the building had a copy of it in their property papers.

The builder seemed to have not even bothered to share the document with the apartment-buyers. And it seems only banks need it for transactions as apartments of the building have been sold and purchased for nearly three decades but most probably on cash.

What I learnt during the whole process was that that you have to spend a lot (above and beyond just the price of the apartment) if you are buying a house including ‘speed-money’ – a term I learnt from the bank’s third-party lawyer – when you are buying through bank mortgage because you will need all the papers to meet the requirments.

Yet, I couldn’t have thought that I could buy a house on my own. The government’s low-cost scheme made it possible for me to own one. The process took me nearly a year. But it was worth making an effort.

Yes there are a number of hurdles, which the government and the banking sector should try to resolve.

Interest payments, cost, and other details

While hurdles remain, the scheme did manage to make me a home-owner.

For the finer details:

The 2-bedroom apartment was worth roughly Rs5.5 million.

The bank approved Rs4.5 million as housing loan under the Tier-2 scheme with monthly installments coming to rough Rs30,000 at the moment. The housing mortgage will last 20 years.

For the first five years, the mark-up will remain 5%. It will then increase to 7% from year 6 to 10. In the last ten years, banks would charge KIBOR plus 4%.

The article does not necessarily reflect the opinion of Business Recorder or its owners