The House Building Finance Corporation (HBFC) (now incorporated under companies as "HBFC Ltd." ordinance 1984 since July, 2007) was established in the year 1952 as a Statutory Federal Body with the object of providing financial assistance for construction and purchase of houses to the people of Pakistan in urban as well as rural areas. With its establishment, the concept of institutionalized housing finance was introduced for the first time in Indo-Pak sub-continent for providing long term finance for house building. Vision

To be the prime housing finance institution of the country, providing affordable housing solutions to low and middle income groups of population by encouraging new constructions in Small & Medium Housing (SMH) sector.  Mission

To be a socially responsible and commercially sustainable housing finance institution. Target market – Low income and middle income groups  of populationsTarget areas – No negative list, all legalized residential locationsResponding to housing needs of low income groups is a social responsibility, beyond that everything has to be 100% commercially viable and sustainable to ensure an on going housing finance entity.

Ghar Aasan Flexi

House Building Finance Company Ltd offers attractive housing finance products best aligned to market demands, catering to the varied needs of the customer, providing easy payment plans. HBFCL is transforming into a modernized, customer friendly, and socially responsible organization providing affordable housing finance solutions.

Ghar Aasan Flexi is based on the concept of Diminishing Musharaka with the following four categories to meet the needs of our customers:

Purchase of a residential property Construction of residential property

a. Residential construction on Applicant’s owned landb. Residential construction on applicant’s owned house (on advance stage construction i.e. up to lintel

level or roofed) Renovation of an existing residential property. Replacement of an existing housing finance 

 

Following are the salient features of the scheme:

Maximum Ceiling 

Financing is available up to Rs.10 million for purchase, construction & balance transfer facility subject to the customer’s eligibility & location of house or apartment.  For renovation the maximum financing limit is up to Rs.2.5 million.

The investment is repayable in affordable installments over a maximum period of 20 years depending upon the customer’s age and repayment ability.

The overall cost in acquiring housing under the scheme is moderate as compared with other banks With early unit purchase alternatives, customer can purchase as many number of units as they need subject

to prepayment charges.  By making advance payment, the customer will avail two benefits i.e. get revised and reduction in monthly installment or minimum period of loan.

Feel secure in terms of equitable & registered mortgage. Comply with Sharia compliant scheme. Enjoy hassle free repayment facility.

Construction

With this convenient plan, the customer can construct a residential property on already owned land or to add onto on an existing residential unit.  HBFCL will facilitate up to 60% of total projected cost of construction (Land cost + Cost of construction). 

Purchase 

The customer can live their dream of owning a house in minimum time.

Renovation

For renovation on an existing house, apartment or bungalow financing up to Rs.2.5 million is available pertaining to urban cities. For other rural cities, maximum investment limit  is Rs.0.5 million.

Balance Transfer Facility

Balance transfer is applicable on financing, pertaining to purchase or construction of a residential house, apartment, or bungalow .

Pakistan Property News: House Building Finance Corporation (HBFC)March 10th, 2010

Pakistan Property News: House Building Finance Corporation (HBFC)House Building Finance Corporation (HBFC) Has Put An Embargo On Loan Disbursement To Housing Projects Which Has Resulted In Delay In CompletionPublished on March 09, 2010 Comments (Be the first)by Association of Builders and Developers of Pakistan

(Asianet-Pakistan and OfficialWire)

KARACHI, PAKISTAN

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The House Building Finance Corporation has put an embargo on loan disbursement to housing projects which has resulted in delay in completion and if the Housing Project Zone of HBFC is not provided Rs. 2 billion on urgent basis, a complete stoppage of construction activities is imminent.

This was stated by Engr. Farooq-uz-Zaman Khan while talking to journalists. Billions of rupees of the public and builders are stuck up in these projects. If HBFC fails to provide the required housing finance, it is feared that the real estate and construction sector will face the same fate as that of Dubai, resulting in increased unemployment and other social problems, said Farooq-uz-Zaman.

The difficult policies initiated by HBFC are impossible to comply with and have made it impossible to acquire housing finance. In the last financial year HBFC financed to the tune of Rs. 3.8 billion whereas in the current year a negligible amount of Rs. 700 million is disbursed.

The new management of HBFC has no clue about the predicaments faced by the poor segment of our society and is replicating the policies of commercial banks and are trying to implement model of Singapore and Malaysia. The requirements have been made complicated and impractical.

As per the new verification of income policy, income of all members of a household is required to be verified and on each verification case Rs. 5000 fee is levied. On the project policy file the processing fee is increased to Rs. 500,000. Even those allottees in a project, who are not interested in acquiring loans, are asked to provide the original ownership documents. Of the total number of 50,000 cases of HPZ, recoveries have been made in 35,000 cases and only 15,000 cases are active. The only exemption provided is to widows and on these cases to the payments to HBFC are being made.

MrPressRelease App for iPhoneDuring the last 4 years HBFC has recovered Rs. 17 billion and in the year 2008 recoveries have amounted to Rs. 3.2 billion whereas in the year 2009 Rs. 3.6 were recovered. In the years 2005-2008 a

total amount of Rs. 10 billion were recovered and in the last two years Rs. 6 billion have been recovered.Answering a question Chairman ABAD said there is a shortage of 8 million housing units and keeping in view the loaning profile of HBFC it seems that the back log of housing units would never be wiped out.

Vice Chairman ABAD Muhammad Arif Siddiq said HBFC has stopped loan disbursement to public projects. The corporation is following the policy of commercial banks, sidelining the redressal of difficulties of the public.

Chairman ABAD-Southern Region Saleem Kassim Patel said the percentage of Non Performing Loans (NPL) is declining. The pattern of NPL in HBFC is different from that of commercial banks. In housing finance, all loans are backed by a collateral or mortgage. Post dated checks are acquired from the client and the corporation has right to take over the property to recover the loan. He added that in 2004 the NPL of HBFC was 67% which has gone down to approximately 37% now.

ABAD suggested to the Government that State Bank of Pakistan and HBFC should be provided structural and financial support in order to improve the capabilities of HBFC. The policies of HBFC should be made public friendly. Instead of providing loans to upper and high income segment, the target should be the lower and middle income group. Steps should be taken to improve the Mortgage to GDP ratio.

HBFC should implement a policy of decentralization and the regional chief should be empowered to approve loans at district level. The target set for providing finance should be achieved at all costs. An effective mechanism for recoveries should be made so that the problem of shortage of funds is solved.

 

COMPANY PROFILE 

House Building Finance Company LimitedThe House Building Finance Company Limited (the Company) is an unlisted public company, incorporated in Pakistan on June 13, 2006 under the Companies Ordinance , 1984. The Registered office of the Company is situated at Finance and Trade Centre Shahrah-e-Faisal, Karachi. The Company has taken over all assets, running business, contracts, liabilities and proceedings of the House Building Finance Corporation (HBFC), established in 1952 under the House Building Finance Corporation Act 1952(XVIII OF 1952) by the Government of Pakistan from closing of the business on  December 31, 2006, the effective date, pursuant to a Vesting Order SRO.I/2007 dated July 25, 2007 issued by the Finance Division- Government of Pakistan. Accordingly, HBFCL is no longer a statutory institution. To date, HBFCL has financed around 456,256 units for Rs.47.82 billion, successful recoveries of Rs.64 billion (inclusive of mark up) and has a housing portfolio of Rs.14.6 billion. At present the Company is handling over 77,666 operative accounts with a work force comprising of 951 officers and support staff. The Company operates throughout Pakistan including Azad Kashmir and Northern

areas.

House Building Finance Company - Fraud By MdDiscussion in 'Corporate Governance' started by my_words, Apr 23, 2012.

1. my_words New Member

Corporate Governance is about those who govern corporate entities. In our country even MD of government owned companies acquire position fraudulently and there is no one to take action. Stae Bank of Pakistan, SECP are party to fraud and just see the wastage of money of citizens of Pakistan in the hands of fraudulent foreign national MD.

Turnover is the parameter to judge the progress of institution. HBFCL has lost its business as its disbursement/ turnover/ lending has suffered extreme downfall during the current MD tenure. As reported by Ummat on 20.04.2012, before this MD , disbursements were Rs.3.85 billion rupees while when he was made MD in 2009 lending falls to 715 million and then 679 million in 2010.

http://ummat.com.pk/2012/04/20/news.php?p=news-11.gifhttp://ummat.com.pk/2012/04/20/page-1.php

The only earnings and recoveries are from the interest arising out of advances made by the company before appointment of this MD. This MD has only spent the amounts on his own and own consultants , advisors appointed in violation of procurement rules of Pakistan.

How House Building Finance Company Limited can perform for the betterment of the country when its Managing Director is fraudulently appointed. MD, Mr. Azhar Abbas Jaffery, was appointed under section 11 of the Banks Nationalization Act, 1974. According to section 11(12)(c) A person who is not citizen of Pakistan shall not be appointed under this section. According to section 11(3)(c) , a person who is disqualified under section 12 after appointment shall, Stand Removed.

You may send NIC of Mr. Azhar Abbas Jaffery, 42301-6474193-1 by sms to “8300” i.e. Election Commission of Pakistanand to Nadra at "7000". You will get that the said persons has surrendered his nationality. If you put the same NIC at NTN verification, at FBR website address

http://regsys.fbr.gov.pk/Registration/onlinesearchTaxpayer.aspx

you will confirm that this NIC belongs to Mr. Jaffri. However, Finance ministry has not declared him as stand removed up till now. Estalsihment Division has not issued such notification. Even State Bank of Pakistan, who granted him, fit and proper certificate has not withdrawn it yet.

So negligent is our State Bank of Pakistan that it gives fit and proper certificate to a foreign national without bothering to even verify its identity card or seeing the original at least, which he had already surrendered before appointment. All the funds of HBFC belongs to the people of Pakistan and MD is just using it to hire consultants.

Lawyer of HBFC from Islamabad to Karachi to represent HBFC in Court. Why HBFC could not find lawyer in Karachi. The answer is that present legal head Ms. Atiqa, remained associate lawyer at Islamabad lawyer's firm at Islamabad. So she hired that lawyer who every time comes from Islamabad gets air ticket and huge travelling allowance, part of which might be shared with those who got him hired. Mr. Jaffri has hired many consultants for salary of millions of rupees. According to news of Ummat, in which cheque numbers are also given, MD has granted bonus to himself.

In hiring the lawyer and other consultants, the public procurement rules have been violated. Mr. Jaffri is wasting the public money for his own purposes. But surprisingly, Public Procurement Authority is silent.

HBFC has been ruined by MD. Business of financial institution like HBFC solely depends on how much it lends. Its lending/ disbursement is quite low as all the money is being spent on paying official and consultants from whom commission is received under the table.

http://www.weeklypulse.org/details.aspx?contentID=2131&storylist=2

The government & court should enter the name of such person in Exit Control List immediately so that it may not run away with the wealth of the people of this country. Further, he should be made to return salary earned by him as he got appointment by fraud that he is citizen of Pakistan, though he had surrendered nationality to get Nationality of Singapore. Business Recorder on 17.04.2012, narrated this news.

http://www.brecorder.com/money-a-banking/198/1177900/

It is strange that government has only restrained from calling meetings. Have not removed MD though he stands removed by law. Further, criminal proceedings and arrest should also be initiated for fraud. But government is just giving him time to embezzle public money more along with his colleagues. If government is serious he should be straightaway removed and arrested. State Bank of Pakistan, Securities & Exchange Commission of Pakistan , Government of Pakistan all are silent. No inquiry is needed. Banks Nationalization Act clearly says that non-Pakistani is not entitled to be appointed. It seems that officers of SBP, SECP, Ministry of Finance &

Ministry of Establishment are party to this fraud. It is clear that how much the head of financial institution could pay to officers of State Bank, SECP and Ministers and secretaries to keep silent.

Further FIA should investigate his frauds.

It is criminal act to make a foreign national and keep him head of institution who is spending millions of rupees of public money for his friends and ruining the business of HBFC by decreasing disbursements.

Not only Jaffri should be made to return salary and suffer imprisonment, but also Governor SBP, Chairman SECP and Finance Secretary, Secretary Establishment, Director FIA, should be punished for being party to the fraud or at least for gross negligence and not taking action.All the parties to fraud and involved in embezzlement of the public fund should be penalized. We pay the taxes and these corrupt foreign nationals enjoy the public money and ruin our institutions and no one is taking action against them.

my_words, Apr 23, 2012

#1

2. my_words New Member

RESPONSE OF HBFCHBFC has submitted its reply in Business Recorder on 25.04.2012, which is quite absurd.

HBFC Response

It[HBFC] wishes to set the record straight for the information of the public…... "Regarding the appointment of the Managing Director, HBFCL has clarified that the appointment of the MD/CEO of HBFCL is governed by Article 72 of Association of HBFCL which states that 'There shall be a Chief Executive of the Company who shall be appointed by the Board with the prior approval of the Federal Government.

The Chief Executive shall be appointed from amongst persons having knowledge and experience in banking, preferably in the field of finance and economics in accordance with the Fit and Proper criteria as laid down by the State Bank of Pakistan from time to time.' "From the above it can be seen that the requirements spelt out in the relevant Article of Association do not list Pakistani citizenship as an eligibility criterion.

Our Comment

And what about Banks Nationalisation Act, 1974. Why HBFC has observed silence about Banks Nationalisation Act which in sections 11(12)(c) & 11(3)(c) clearly says that MD shall only be citizen of

Pakistan while Non-citizen shall stand removed. Whether the Act of Parliament is superior or the Articles of Association? According to Section 11A, which says “Notwithstanding anything contained in any other law for the time being in force, section 11 of Banks (nationalisation) Act shall apply to (i) NDFC (ii) ICP (iii) National Investment Unit Trust (iv) HBFC (v) SMFC (vi) RDFC (vii) First Women Bank Limited.” Hence Section 11A not only overrides Articles of Association but also the Companies Ordinance, 1984, as it starts with “Notwithstanding anything contained in any other law”Whether HBFC, as well as its legal heads and legal advisor drawing millions of rupees, is ignorant about this law or they have maliciously concealed it. I have learnt that HBFC has said before Sindh High Court, that Managing director has been appointed under Banks (Nationalisation) Act, 1974, which supersede Articles of Association. They are making contradictory statement here. Further, its Articles of Association also says that Company shall be governed in accordance with concerned provisions of Banks Nationalisation Act. Whether MD and its team is also ignorant of Articles of its company. What a Performance? This is how corrupt people are expected to work.

HBFC threatened Transparency International that it reserves right of legal proceedings. Now should Transparency International file legal action against MD HBFC for its malicious statements against TI and for giving misleading statements contradictory to its statements before the Honourable Sindh High Court.

HBFC Response

Further, the 'Fit and Proper' criteria mentioned in the said Article and as laid down by the State Bank of Pakistan, requires that fitness & propriety of a candidate for the office of the Chief Executive Officer of a Bank or a Development Financial Institution, be assessed on the following broad elements: a) Integrity, Honesty & Reputation; b) Track Record; c) Solvency & Integrity; d) Qualification & Experience; e) Conflict of Interest.

Our Comment

While obtaining fit and proper certificate , fact of surrendering nationality was concealed. Fraudulently & by cheating, pretended to be Pakistani National to bypass the obstruction of section 11(12) of the Banks (Nationlisation) Act, 1974, MD extracted this position. This is the Honesty & Integrity of Mr. Azhar Jaffri. But as Civil Aviation is responsible for fall of plains which are not air worthy similarly State Bank of Pakistan is responsible for giving fit and proper certificate in violation of law and then not withdrawing it not taking action after knowing that such certificate was taken illegally and by fraud. Similarly, SECP was deceived by giving NIC numbers of surrender /invalid NIC but SECP is also not taking action. Nevertheless, responsibility of Secretary & Minster Finance Division does not reduce.

HBFC RESPONSE

"Thus neither the Incorporation Documents of HBFCL nor the governing law and regulations impose any condition to the effect that the Chief Executive Officer of the Company must be a Pakistani national. 

OUR COMMENTSAfter all MD has admitted that he is foreign national not citizen of Pakistan. Apart from Banks

(Nationalisation) Act, which does not allow non-citizen to be MD, one thing more is to be considered. One who is foreign national by origin and one who is foreign national because he surrendered the nationality of Pakistan to get nationality of another country, are not equal. Mr. Azhar Jaffri is one who entered into agreement of loyalty with another country AFTER ENDING such AGREEMENT with state of Pakistan and how he can be made of head of institution of Pakistan which is made to provide shelter to middle class of Pakistan. How billions of rupees can be put to his disposal who is utilising this for its own benefit. Then he deceived the government , State Bank of Pakistan SECP, this nation and violated Banks Nationalisation Act, 1974.

my_words, Apr 25, 2012

#2

3. my_words New Member

HBFC Response"Regarding the continuance of the MD in office after the expiration of his contract in January 2012, HBFCL has referred to Section 199 (3) of the Companies Ordinance which clearly states that 'The chief executive retiring under section 198 or this section shall continue to perform his functions until his successor is appointed unless non-appointment of his successor is due to any fault on his part or his office is expressly terminated.' "HBFCL has further clarified that since January 2012 letters have been written to the Ministry of Finance seeking its direction on the extension of the MD's tenure or the appointment of a new MD and till date the decision of the Ministry is awaited. CommentGovernment has already issued circular that those whose contract has been expired and are waiting for renewal of tenure should leave the position immediately and go home. What MD Is waiting for?

HBFC Response

"HBFCL also condemns the allegation by Transparency International that the appointment of HBFCL Group Head, Legal, Strategy & Marketing and of legal advisor Awan Raza were not proper.

"It has clarified that in the case of the Group Head, the position was not only advertised but PPRA was strictly followed.

Further the Group Head recruited was previously serving in the Competition Commission of Pakistan and was not a partner in M/S Awan & Raza as Transparency International Pakistan has wrongly stated.CommentReally, but HBFCL website introduces her as “Aatiqa Lateef Aatiqa Lateef joined House Building Finance Company Limited in 2010 and is Group Head, Legal, Strategy & Marketing. Aatiqa Lateef….. Her experience in Pakistan includes the Competition

Commission of Pakistan andPartnership at the law firm of Awan Raza. http://www.hbfcl.com/aatiqa_lateef.html

What a fraud and liar is HBFC. Readers rush and see it unless HBFC may change its website. 

HBFC ResponseIn the case of Awan Raza, it is to be noted that they are just one of several law firms which are on the legal advisors panel of HBFCL, which includes amongst others, Hafiz Rehman, Mohsin Tayebaly, Haidermota, Faisal Ghani, Nafis Siddiqui and other relevant legal specialists and firms as needed. 

Our CommentsGood attempt to fraud with law and throw away the provisions of law. So now onwards every concerned institution shall keep most of the lawyers, consultants, suppliers, service providers, contractors on its panel. Then they may award contract to whomever they like without fulfilling provisions of Public Procurement Laws. A simple way to deceive the nation and its law, what else can be expected from one who has surrendered nationality of Pakistan. But what to say of Governor State Bank of Pakistan, Chairman SECP, Ministry of Finance, Director FIA, PPRA, why they are keeping this fraudulent mentality in chair. What are they getting in return?

HBFC Response "Regarding Transparency International Pakistan's false allegations that the HBFCL MD granted himself millions of rupees as bonus (a grossly exaggerated amount), HBFCL has stated that Transparency International Pakistan has not only stated something that is factually incorrect but has also demonstrated its non-transparency and lack of knowledge about the rules governing such matters.

The HBFCL MD is not authorised to grant himself bonuses and all bonuses have to be approved by the board of directors, which includes a nominee director of the Ministry of Finance. The bonus given is thus based on performance and duly approved by concerned authorities. 

Our CommentYes, this is what everyone is seeing, that Board, MD and Ministry of Finance, probably State Bank of Pakistan also, all are acting in concert to keep fraudulent MD in position, to give him bonuses, a legitimate way to take out the money of the people of Pakistan and share it afterwards.

HBFC Response"The malicious statements issued to the media by unscrupulous vested interests, have also tried to paint a wrong picture of HBFCL's efficiency by stating that loan disbursements have greatly reduced during the tenure of the present managing director.

Our CommentThe news Articles gives comparative figures for last three years to establish that disbursements have fallen down. It says, “It was further alleged that before the appointment of Mr. Jaffery in the HBFC, the disbursements were Rs.3.85 billion rupees while when he was made MD in 2009, the lending fell to 715 million and

then 679 million in 2010.” If HBFC says it is incorrect it should give its own figures matching its annual report. Why HBFC has not given any figures? Because the figures given are true.

HBFC Response…….."Further, the success of the management in turning around the organisation is clearly evident from the fact that in financial year 2007 and 2008 HBFCL reported a loss of Rs 959 million and Rs 414 million respectively, whereas in 2009 and under the new management, the loss was reduced to Rs 109 million, followed by a profit of Rs 113 million in financial year 2010 for the first time in several years.

Now for financial year 2011 a profit of over Rs 100 million is expected to be declared," the clarification concludes.-PRCommentA layman also knows that financial institution earns profit from lending and only from lending. So all this profit relates to lending which was made prior to current MD and is for 10/20 years. Performance of current MD relates to turnover of the Company which has declined without dispute. HBFC also failed to give any figures for disbursement. 

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Project Report on House Building Finance Corporation (HBFC) by Commerce Solutions in House Building Finance Corporation (HBFC)

HBFC

(House Building Finance Corporation)

Introduction:

The House Building Finance Corporation (HBFC) (now incorporated under companies as "HBFC Ltd." ordinance 1984 since July, 2007) was established in the year 1952 as a Statutory Federal Body with the object of providing financial assistance for construction and purchase of houses to the people of Pakistan in urban as well as rural areas. With its establishment, the concept of

institutionalized housing finance was introduced for the first time in Indo-Pak sub-continent for providing long term finance for house building.

Vision:

To be the prime housing finance institution of the country, providing affordable housing solutions to low and middle income groups of population by encouraging new constructions in Small & Medium Housing (SMH) sector.

Mission:

To be a socially responsible and commercially sustainable housing finance institution.

Target market – Low income and middle income groups of populations

Target areas – No negative list, all legalized residential locations

Responding to housing needs of low income groups is a social responsibility, beyond that everything has to be 100% commercially viable and sustainable to ensure an on going housing finance entity.

Products:

Ghar Aasan Scheme

Shandar Ghar Scheme

Finance Facility for Small Builders

Ghar Aasan (Flexi) Scheme

Company Profile:

House Building Finance Corporation, the oldest housing finance institute ofPakistan, was established as

a statutory federal body in 1952 with the objective of providing financial assistance for the construction

of houses. Ensuingly HBFC’s scope also branched out into diverse dominions like purchase, repair and

renovation of houses. Later on HBFC’s mission was evermore reformed to specifically target the needs

of the low and middle income strata of the country by providing Small and Medium Housing (SMH)

Solutions, hence successfully providing skilled and user friendly service at affordable costs. Over the

years HBFC’s operation has flourished and is now spread over a network of 3 Regional, 12 Zonal and 58

District Offices, 4 camp offices and 25 Representative Offices/Service Agents and 21 more such offices

will be opened very soon. HBFC today has its presence in 80 cities and towns all over Pakistan and is

targeting to expand its business to 150 cities and towns. HBFC’s Head office is situated in Finance &

Trade Centre Karachi.

Since inception todate, the corporation has financed over one and half million units for Rs. 41.437

billions, provided housing finance facility to 28 corporate clients for Rs. 1.7 million, made recoveries of

Rs. 51.368 billions and has outstanding portfolio of Rs. 19.6 billion. Disbursed Rs. 600 millions flood loans

to over Rs 0.4 million affected families granted remissions to Widows, Orphans and retired Government

Servant of Rs. 1.23 billion on Federal Government’s directive. Its Average annual disbursements and

recoveries are around Rs. 2-1/2 to 3 billions. It has contributed Rs. 17.149 billion towards National

Exchequer in shape of payment of interest, profit and income tax to Government and State Bank

of Pakistan. In 1984-85, the corporation launched Faisal Town Housing Project, at Lahore consisting of

312 bungalows and also constructed 19-storeyed Office Building named “HBFC House”Islamabad. HBFC

owns prestigious Office Buildings/Premises at Karachi, Lahore andHyderabad. It also owns valuable plots

at Lahore, Islamabad, Hayatabad (Peshawar) and Hyderabad. Arrangements are afoot to construct on

these plots modern commercial-cum-residential buildings, estimated to cost over Rs. one billion. Design

concept of 12-16 storeyed Flat Project consisting of 208 apartments atLahore and 12-storeyed office

building at Islamabad conceptualized by M/S NESPAK stands approved by HBFC Board of Directors.

HBFC’s paid up capital is Rs. 3.50 Billion (53.7 percent for Federal Government and Rs. 46.43 percent for

State Bank of Pakistan). The general directive and administration of the corporation and its affairs is

entrusted to a Board of Directors and the Managing Director, who together with the assistance of Board

Committee manages and controls the affairs of the corporation.

HBFC Ltd. which was on its way to become a corporate organization has finally been incorporated as

“HBFC Ltd.’’ under Banking Companies Ordinance 1984, since July, 2007. Henceforth, Part privatization

by offering share holding to firms like IFC, ADB and IDB etc is also a part of the agenda. HBFC Ltd. is also

intent upon the securitization of mortgages and establishment of Real Estate Investment Trusts (REITs)

and Mortgage Bonds (MBs).

To meet the upcoming corporate challenges and to cater to the growing needs of the corporation, HBFC

Ltd. has taken certain drastic steps. It is enhancing its operational efficiency through preparation and

implementation of manuals, computerization, human resource development and elimination of

ineptness and corruption through internal controls and redesigned reward structure. In the near future

HBFC Ltd. plans on expanding its outreach representative offices from 80 to 150 towns and cities. HBFC

Ltd. is trying to augment its market image by having pro-active, efficient and customer friendly policies.

Thus HBFC Ltd. is paving the path for a brilliant future by amplifying its present

HBFC Ltd.‘s main aim has remained to provide Sharia compliant financing to its consumer market.

HBFC’s financing schemes have also evolved over its 55 years of establishment to acquiesce with this

aspiration. These schemes have propelled HBFC towards the fulfillment of its Business Focus which is to

accommodate the low and middle income group’s housing needs. Thus HBFC offers a wide range of

products for the ministration of its consumers. House Construction Financing, financing for purchase of

house/flat, renovation of House (Home improvement financing), loan transfer and Balance transfer fund

is the range offered by this organization.

At present HBFC Ltd. has following housing finance schemes in operation:

1. “Ghar Aasan Scheme” based on diminishing Musharka, a Shariah compliant scheme under which credit for construction and purchase of houses is allowed.

2. “Shandar Ghar Scheme” under which credit for repairs, renovation/up-gradation is available.

3. “Loan facility for Small Builder ” for construction and sale of small houses/flats

4. “Ghar Aasan Scheme (Flexi)” for construction, purchase and renovation for houses/flats

New up-coming Schemes

1. Step-up-plan

2. Savings and Loan Plan

3. Equity Building Plan

4. Construction Project Finance

5. Residential Hostels Finance

6. Home Finance for Overseas Pakistani

7. Syndicated Finance for Large Construction Projects

The earlier schemes which were discontinued were Interest bearing scheme, Profit & Loss scheme based

on income sharing and Simplified & New Simplified Schemes base on income sharing.

HBFC Ltd. FUTURE PLANS:

HBFC Ltd. has been a household name traditionally associated with housing finance. The scenario

changed with the entry of banks and leasing/house finance companies in the house finance sector from

late 1990. HBFC Ltd. had reconsidered its whole business philosophy. This was rather inevitable for its

survival. The new management has brought a revolutionary changes for the Corporation in all areas of

its working including Operations, Human Resource, Administration, Finance, IT, etc as well as client

services.

The strategic changes being initiated is expected to help HBFC Ltd. emerge as a vibrant and customer

friendly housing finance institution thereby establishing more firmly its age old place in the field of

house financing with a new look. HBFC Ltd. occupies a special place in the house finance business as it

has all along catered to the needs of the lower and lower-middle income groups whereas the

commercial banks have targets of high profile clients. Commercial Banks have a large negative list of

locations as well as professions. HBFC Ltd., on the other hand does not maintain any negative list of

locations or professions and it rather encourages applicants from lower income localities, as long as

housing constructions are on valid land title and the client meets other minimum eligibility

criteria. Presently nearly 85% of HBFC Ltd.’s clientele is low-income people where loan amount is less

than Rs.100, 000 whereas nearly 80% clients have per party loan below Rs.500, 000 and have monthly

income between Rs3, 500 to Rs5, 000 and could only afford to pay an installment of Rs1000 to Rs1200

per month in 15 to 20 years besides meeting their monthly expenditure of basic necessities. For HBFC

Ltd., its social role is an integral and inseparable part of its commercial stance.

Since the beginning of the year 2005, HBFC Ltd. is striving for a new outlook with a new ideology.

Consequently, it has changed its Vision to “to be the prime housing finance institution of the country,

providing affordable housing solutions to low and middle income groups of population by encouraging

new constructions in Small & Medium Housing (SMH) sector”. Its Mission is now “to be a socially

responsible and commercially sustainable housing finance institution”

IMPROVE CORPORATE IMAGE OF HBFC Ltd.:

As pointed out above HBFC Ltd. has network of about 58 branches all over Pakistan. In order to expand

its outreach to the small cities and towns, HBFC Ltd. is going to set up around 50 Representative Offices

where market driven techniques like appointment of service agents will also be adopted. The working

conditions in HBFC Ltd. offices are being improved to show that it values and honors its clients, who are

from lower and middle income sections of population and being the working class are the backbone of

our economy.

MEGA HOUSING SCHEMES FOR SMALL AND MEDIUM HOUSING UNITS:

HBFC Ltd. is actively working in association with the Provincial Governments, Corporate Bodies,

Industrial Estates and Public Sector Organizations to develop mega housing schemes comprising of small

and medium housing units, based on horizontal and vertical housing solutions. NESPAK is working as

HBFC Ltd.’s consultant for developing such schemes. In view of the fact that the housing shortage in the

country, particularly for lower and middle income groups of the population is acute and needs some

mega solutions, these mega schemes have achieved paramount importance for the HBFC Ltd.

Accordingly, while containing its retail housing finance products, HBFC Ltd. will focus on bulk housing

schemes so that the housing stock in the country gets increased on fast track.

HOUSING FINANCE FACILITIES TO OVERSEAS PAKISTANIS:

HBFC Ltd. would be launching an online program for the overseas Pakistanis to facilitate them in owning

a house in Pakistan where, on their return, they could live or earn reasonable return by putting the same

on rent. For availing this facility they do not need to visit HBFC Ltd. office as every thing would be

arranged on website and the overseas Pakistanis would have direct contact with the HBFC Ltd. offices

specifically designated and equipped with all the required information for the scheme.

HBFC Ltd. will provide financing facilities as well as “property related service”, which include help in

locating suitable residential locations with detailed information on lists of properties available, classified

by location and price with detailed specifications. Subsequently HBFC Ltd. would be providing them with

additional services such as evaluating the reliability of developer, perusal of the legal documentation,

periodic visit to the project’s site, helping them to determine initial down payment for booking and

assist them in completion of purchase transaction.

OTHER HOUSING SCHEMES:

Other schemes include schemes where experience of Korangi Township can be replicated. Such scheme

is considered as among the best housing solutions to rehabilitate squatters/poor people., Provincial

Governments are being approached with a proposal to earmark a piece of land in suburbs of major cities

starting with provincial capitals for building houses for low income group of population.

PAYMENT OF STATE BANK OF PAKISTAN CREDIT LINES:

Consequent to the direction of the Central Government to make the Corporation a self-sustained

institution, all out efforts were directed towards achieving this objective. Despite of the fact that no

fresh credit lines from SBP were available since 1992, HBFC Ltd. has been able to make following

repayments to SBP by the due dates:

Installment Amount (Rs. in Billion.) Year of Payment

1 First 1.239 2002

2 Second 1.400 2003

3 Third 1.250 2004

4 Fourth 1.365 2005

No payment after 15 January 2005 as in Treasures Department.

The remaining amount of Rs. 1.243 billion is to be repaid over the next seven years with last payment is

due in the year 2012. HBFC Ltd. expects itself to honor its obligation without much difficulty.

FIRST TFC ISSUE OF RS. 300 MILLION:

As a first step towards becoming a self sustained institution, HBFC Ltd. arranged a privately place TFC of

Rs.300 million with M/s Pak-Libya Holding Company (Pvt) Ltd for 3 years on November 5, 2003. The

repayment of TFC was to be made in 12 equal quarterly installments of Rs.332.58 million (mark-up plus

principal) each.HBFC Ltd. has since paid all 12 such installments up to November 2006 on due dates. In

view of this good track record of timely repayment, image of HBFC Ltd. has improved and it would help

the Corporation in obtaining future finances on attractive terms.

LONG/SHORT TERM CREDIT RATING MAINTAINED:

HBFC Ltd. has succeeded in maintaining long term (A) and short term (A1) credit rating for the third

consecutive year. These rating are indicative of strong capacity for timely repayment and low

expectation of credit risk.

These ratings have been assigned by the PACRA, the leading credit rating agency of Pakistan. These

ratings have been awarded on the basis of a steady improvement in organizational performance

particularly in disbursements of “Ghar Aasan” and “Shandar Ghar” Schemes and timely repayment of

our obligations.

With new initiatives underway, improvements in credit rating are expected in future years.

Board Of Directors:

Mr. Zaigham Mahmood Rizvi

Chairman

Chairman

House Building Finance Corporation Ltd. (HBFCL)

Karachi

Mr. Muhammad Iqbal Hussain

Director

Sr. Joint Secretary (Investment)

Ministry of Finance,

Islamabad

Mr. Ijaz Ahmed Malik

Director

Retired Secretary

Government of Pakistan

Islamabad

Mr. Tariq Iqbal Khan

Director

Chairman & Managing Director

National Investment Trust Ltd

Karachi

Mr. Tasneem Ahmed Siddiqui

Director

Retired Director General

Sindh Katchi Abadis Authority

Karachi

Mr. Zakaria M. Fazil

Director

Executive Member

Association of Builders & Developers (ABAD)

Karachi

Mr. Tahir S. Effendi

Secretary

Executive Director

House Building Finance Corporation Ltd. (HBFCL)

Karachi

Management Profile:

Mr. Zaigham Mahmood Rizvi

Chairman

Mr. Zaigham Mahmood Rizvi, is the Chairman of House Building Finance Corporation Ltd. Mr. Rizvi has a

diversified blend of academic qualifications holding a Masters Degree in Business Administration [USA],

besides a Masters Degree in Economics and Engineering. Mr. Zaigham holds Diploma Institute of

Bankers Pakistan and was rewarded with a gold medal. Mr. Zaigham also holds a qualification of

Institute of Chartered Secretaries of Pakistan Association in Development Bank Management. He has

been a Fulbright Scholar - USA from 1975-1977.

Mr. Zaigham Rizvi has overall professional experience of 28 years spread over diversified fields of

Manufacturing, Academics, Development & Investment Banking both in Pakistan and overseas.

Mr. Rizvi’s last tenure was as the Managing Director, Pak-Kuwait Investment Company (Pvt) Ltd (PKIC), a

joint venture Financial Institution between Pakistan and Government of Kuwait started on March 19,

2001. Under his guidance and supervision, the Company not only excelled in nearly all areas of its

financial performance, it also attained new levels of a well disciplined organization, having well

documented systems and procedures. Same is recognized by its shareholders /Directors; it is candidly

announced by external evaluation like “AAA” Rating by the two Credit Rating Agencies, the Corporate

Governance Rating of CGR-9 and the ISO 9001: 2000 Certification. He remained in Pak-Kuwait till January

25, 2005.

Prior to PKIC, Mr. Rizvi tenure, with Pak-Libya Holding Co. (Pvt) Ltd., also a joint venture financial

institution, was also marred with visible signs of improvement in the company’s operation and

profitability since he assumed its charge in December 1996. During the period the company’s balance

sheet sized grew from around Rs. 4.0 billion to Rs.10 billion, its operations largely diversified and profits

nearly doubled.

Mr. Zaigham has served for 5 years the manufacturing sector at Dawood Hercules Chemicals Company, a

fertilizer plant in Pakistan. He has served with Oman Development Bank - Oman for 8 years. His business

links with the financial circles of the Arab World spread over 22 years, providing him with good

networking and exposure to financial circles of the Arab world.

Mr. Zaigham Rizvi has also served on the Boards of many Corporate Entities in Pakistan including

Islamabad Stock Exchange (ISE) for three consecutive terms and the SECP nominee Director on the

Board of Karachi Stock Exchange.

Mr. Rizvi is the Chairman and Founder of Mutual Fund Association of Pakistan and Vice Chairman of

Pakistan Banks Association. He has been playing a key developmental role in promotion of the IT

industry in Pakistan, while promoting Pakistan's First IT Venture Capital Company, PakVenCap.com

Private Limited. He is recipient of IT Excellence Award 2002 for IT Pioneer.

Senior Executives:

Mr. M.A. Wahid,

Executive Director,

Head of Support Functions.

Mr. Mujahid Zameer,

Executive Director,

Provincial Chief Region-C, Sindh & Balochistan.

Mr. Tahir Saeed Effendi,

Executive Director,

Head of Finance

Chief Financial Officer

Company Secretary

Mr. M. Shabbir Alam,

Executive Director,

Head of Recovery & Special Projects.

Mr. Nadeem Rafi Khan,

Executive Director,

Provincial Chief Region-B, Punjab.

Mr. S.A.S.A. Sayef Hussain,

Executive Director,

Head of Audit/Chief Internal Auditor (CIA).

Mr. Syed Shahood Alam,

Executive Director.

Mr. Khalid Aftab Khan,

General Manager,

Head of Policy & Planning.

Mr. Paul Francis,

General Manager,

Head of Information Technology.

Mr. Rehan Wasi,

General Manager,

Head of Treasury.

Mr. Mohammed Akram Tariq,

General Manager,

Housing Project Zone.

Ms. Sarwat Gilani,

General Manager,

Head of Risk Management.

Products of HBFC:

A) Ghar Aasan Scheme :

The Management of HBFCL has taken bold steps in helping its customers obtain affordable quality housing to fulfill their individual needs and expectations. We are now committed to play a prominent role as a socially responsible and commercially sustainable house financing institution of the country.

The Ghar Aasan Scheme will support you in purchase or construction of house / flats. The salient features of the scheme are as following :

1. Financing support up to Rs.75,00,000/ is accessible to be provided to all

prospective customers subject to the customer’s eligibility & location of the

project.

2. The loan can be repaid over a maximum repayment period of 20 years in

affordable installments depending on the customer’s age, repayment ability and the share in the rental income.

3. The overall cost in acquiring housing under the scheme is much more

attractive as compared to other financing institutions.

4. Sharia compliant scheme.

5. Hassle free investment & repayment facility.

How to Apply

Prerequisite for Construction/Extension of house:

·Title to land

·Construction minimum up to plinth with DPC

·Proof of repayment capacity

·Age (Minimum 18 to Maximum 59 years)

Procedure:

1. Application Form* of Ghar Aasan Scheme to be filled out completed by the customer.

2. Concerned Representative Office or District Office to be visited by the Customer with the

required original documents along with a set of Photostat copies, Application Form duly

filled in and 3 recent passport size photographs.

3. The customer’s documents shall be scrutinized for compliance of the requirements

(target: same day).

4. the customer will be interviewed by the District Manager.

5. The customer’s investment application will be registered after payment of required amount

for which a receipt will be given to him;

6. Legal scrutiny of title documents will be carried out by our Law Officer/Legal

Advisor/Advocate. (target: 3 days)

7. The customer’s income will be verified by an authorized officer of HBFCL.

Proof of Income:

The customer is required to produce proof of his income which shall form basis for determining his

eligibility for a loan depending on his capacity to repay.

Our District Manager shall be pleased to guide you through the rest of the process.

Sanction 0f Investment:

By the credit committees at Zonal, Regional & Head Office.

Note: There are 12 Zones in HBFCL; each Zone is controlled by a General Manager or a Zonal

Manager.

Steps after Sanction of Investment:

· Issuance of acceptance letter (The customer should carefully read the terms of acceptance letter

and give his consent by signing the document);

· Inspection of your house/flat/site by HBFCL authorized officer to check the stage of

construction.

· Photographs of the site will be taken;

· Conformity of construction with approved building plan will be checked;

· Deposit of post-dated cheques by the customer according to the repayment schedule will be

required;

· Fixation of stamps and completion of assignment deed will follow.

· The customer will provide us with the insurance premium paid receipt of advance 24 months.

· Promissory Note and Letter of Continuity to be signed by you.

· Undertakings by applicant(s), guarantor(s) if any.

Release of HBFCL disbursement (i.e. HBFCL investment in your property):

On completion of above formalities, investment shall be released to the customer according to

the stage of construction in tranches/ installments according to the specification of sanction

letter.

The first cheque shall be delivered in the presence of Sub-Registrar at the time of execution of

Deed of Assignment. Subsequent cheques shall be delivered, concomitant to the stage of

construction, as specified in Acceptance letter and in Deed of Assignment.

For purchase a house/flat Requirements:

· The vendor (seller) should have clear and marketable title, free from all encumbrances. The

house/flat should not be more than 45 years old,have sound and solid construction.

Investment will be made at all the coastal areas except for the front row of Sea View Township

and Darakhshan Villas Clifton, Karachi subject to submission of soundness Certificate from the

PBA approved evaluators.

· House purchase facility is available in Urban Area at District Quarter / Tehsil subject to the

condition that construction should be “A” Class & all basic amenities of life should be available.

· Sale Agreement, Title Deed, Valuation and Soundness Certificate (as per format) from an

approved Architect will be required in addition to other documents. Investment shall be

released in one tranches / installment. The cheque shall be delivered to you in the presence of

Sub-Registrar at the time of execution of Deed of Assignment.

HBFCL Message to its Partners:

Our goal is to assist in providing affordable housing finance and to develop a reputation as a premier

financial institution providing service in a reliable, efficient and customer friendly manner.

Eligibility Criteria:

Age:

Applicants between 18 to 60 years of age are eligible for this scheme in order to authenticate confirmed

clearance of the investment liability (relax able up to 65 years on case to case basis).

If the customer is not in a position to clear the investment liability within 60 years of age, he can provide

guarantee of person or persons having inheritable right in his property who could take repayment of

investment liability within the above age limit, in deserving case, guarantee(s) of brother(s), sister(s) or

their adult children i.e. sons / daughters in Law etc. are also acceptable.

Race, Caste, Creed :

All Muslim or non-Muslim citizens of Pakistan, Azad Kashmir, Northern Areas

Income :

The customer should be employed / self-employed and have sufficient repayment capacity to meet the

investment obligations; Proof of income: Salary Certificate, Affidavit, Tax Return

Property :

The customer should already possess ownership of the residential plot upon which house is intended to

be constructed or Addition of floors/ additional rooms to the house is intended to be made.

Purchase of house/ flat :

The vendor should have clear and marketable title free from all encumbrances and the house/flat is not

more than 45 years old.House purchase facility is available in Urban areas of District Quarters/Tehsil

subject to the condition that construction should be "A" class and all basic amenities of life should be

available.

Maximum covered area :

No limit.

Lending Profit Rates

Repayment Period = Maximum 20 Years

Location

Rural Area

In all Urban Areas including District Head Quarters, Tehsils & Small Towns

Urban Areas of SUK / LAR / ATK / SWL / KSR / SKP / BWP / GRT / SGD

Urban Areas of ABTTD / GRW / SKT/R.Y.KHAN / WAH CANTT

Urban Areas of HYD / QTA / PSH

Urban Areas of KAR / LHR / MTN / ISL / RWP / FSBD

Investment Limit

Rs. 150,000/-

Rs. 1,000,000/-

Rs. 1,500,000/-

Rs. 2,500,000/-Rs. 5,000,000/-

Rs. 7,500,000/-

Rent 15.5% 15.5% 15.5% 15.5% 15.5% 15.5%

Appreciation 2.5% 7.5% 7.5% & 10% 7.5% & 10%7.5%, 10% & 12.5%

7.5%, 10% & 12.5%

Note:

(i) Rental Rate will remain constant during the entire tenor of investment.

(ii) Insurance Premium @ 0.50 paisa per thousand per month.

(iii)Lump Sum Profit rate will be applied with applicable appreciation rate if partner wants to close the account within two years from the execution of deed of assignment & partnership.

B) Shandar Ghar Scheme :

The Management of HBFCL has taken drastic steps to help people add value to their existing abodes at a reasonable cost. These efforts are targeted at fulfilling individual needs and expectations. HBFCL is actively aiming at playing a remarkable role as a socially responsible and commercially sustainable housing finance institution.

Hence HBFCL has devised a scheme by the name ofShandar Ghar (home Improvement Scheme), which is purported to support the borrowers to purchase materials, fixtures and fittings for the renovation of their houses.

Its salient features are as under:

1. The maximum financing support HBFCL offers is up to Rs.2,500,000/-;

2. The loan can be repaid over a maximum period of 10 years in affordable

installments.

3. The applicable Murabaha profit is 13.5%. Thus the overall cost charged to

each borrower will be considerably less as compared to other financing

institutions.

4. This is a Sharia compliant scheme based on Murabaha mode of financing.

5. It offers hassle free investment & repayment facility.

6. Early repayment facility is available.

Eligibility Criteria:

All Pakistani nationals having clear title to the residential property in which repair renovation and

improvement is required. Employed /self employed / own business, having sufficient repayment

capacity. Existing partners of HBFCL with active accounts.

Financing shall not exceed:

50 % of the Incremental value of the property i.e. (forced sale value of the property + bill of quantity).

80% of Government Saving Certificates, or

80% of the registered Provident Fund balance of the customers in his/her terms of employment.

Subject to minimum of RS. 25,000/- and maximum of RS. 2,500,000/- and adequacy of income.

Security :

Equitable mortgage of the house.

Localities :

·Financing under Shandar Ghar Scheme is available in all the urban areas of Pakistan.

·Additional collateral of moveable or immoveable property offered by the applicant at the discretion of

HBFCL.

·The property to be renovated /improved shall be RCC/RBB construction.

Repayment Period :

Up to 10 years.

Repayment Capacity:

Repayment Capacity—New Customers :1. Up to 50% of net monthly/verifiable income i.e. (Gross Income

minus deductions = Net Monthly Income): If the total cast of house is double of the amount of investment applied. In other cases the current repayment capacity @ 40% of the net monthly / verifiable income will continue to be taken.

2. Existing Partner: Up to 50 % of net monthly/verifiable income i.e. (Gross Income minus deductions minus monthly installment of existing investment payable to HBFCL = Net Monthly Income); if the total cost of the house is twice the amount of investment applied for. In other cases the current repayment

capacity @ 40% of the net monthly/verifiable income i.e. (Gross Income minus deductions minus monthly installment of existing investment payable to HBFCL = Net Monthly Income) will be taken.If the entire investment has been availed on affidavit declaring that the deponent 9 applicant/guarantor) have sufficient means to pay back the investment, Affidavit shall be accepted on the same pattern.

Application Fee :The customer will be required to deposit processing fee in designated bank branch according to schedule given below:

Investment Limit

Up toRs.300,00

0

AboveRs.300,000 & up toRs.500,00

0

AboveRs.500,000

& up to Rs.1,000,00

0

AboveRs.1,000,00

0 & up to Rs.2,500,00

0

One Time Processing

Fee

Rs.5,000/- Rs.7,000/- Rs.10,000/- Rs.15,000/-

Furthermore, he will have to bear the stamp fee, registration fee and other incidental charges required for Equitable Mortgage etc.

Lending Rates:

Location = All the urban areas of Pakistan

Repayment Limit = Maximum 10 years

Investment Limit = Maximum Rs. 2,500,000/-

Rate of Profit = 13.5%

C) Finance Facility for Small Builders :

A large number of Small Builders are engaged throughout the country in constructing and selling individual houses on small scale. In order to encourage them, HBFCL has launched "Finance Facility for Small Builders" which will help Overcome the shortage of houses in the country and would simultaneously be instrumental in boosting up national economy as a whole.

Salient Features:

1. Mode of Financing

Musharakah.

2. Financing Limit.

PKR 7.5 Million

3. Facility Tenor

12-15-18 Months (optional) – extendable for further 03 months. The Builder shall

be required to complete and sale house(s) / flat(s) within one of above agreed or

extended tenor of investment. Extension shall be granted by the respective Provincial Chiefs on receipt of such request in writing from the builder one month before the expiry of agreed tenor.

4. Availability

Initially, this facility shall be available in Karachi, Lahore, Islamabad/Rawalpindi, Multan, Faisalabad, Peshawar, Quetta,Abbottabad & Wah Cantt. (cities only).

Qualifying age

4. The Builder should be at least 25 years of age and not more than 65 years at the time of the maturity of Musharakah.

6. HBFCL’s Equity

a) House

50% cost of the house as assessed by the Corporation.

b) Flat Project

50% cost of project or the estimated cost of construction whichever is less.

7. Profit

14.5% p.a. (in form of utilization cost of number of Musharakah unit(s) outstanding).

8. Musharakah Unit(s)

Corporation’s Finance Facility will be divided into Musharakah unit(s) according to the number of houses/flats. The Builder will purchase such unit/unit(s) at its/their face value within the agreed or extended tenor of Musharakah.

9. Mode of payment

The builder will be required to submit separate post-dated cheque(s) for the profit as well as for the amount finance facility, in advance.

10. Payment of profit

The profit will be calculated for the agreed (opted) tenor of Musharakah, which will also be payable in lump sum through a post-dated cheque(s). In case of extension in agreed tenor for further 03 months, the Builder will pay profit of extended period in lump sum through additional post-dated cheque(s).

11. Purchase of units

The Builder shall be required to purchase the Musharakah Unit/Units within the agreed tenor or shall submit before the expiry of agreed/extended tenor, application(s) from the intending buyer(s) for transfer of Corporation’s Finance Facility, as per his/her entitlement under Ghas Aasan Scheme (GAS).

12. Maximum No. of facilities at a time

The Builder can avail upto two finance facilities at a time, subject to maximum of Rs. 7.5 Million.

13. Personal information

The Builder will be required to submit personal information along with supporting documents only once and the same will not be demanded again if he initiates another project and apply for another facility. However, it will be the responsibility of the builder to immediately intimate any change in his particulars provided to HBFCL earlier.

14. Valuation of property

The projected construction cost of house/flat shall be assessed as per following rates of construction:-

a) Posh Localities declared by the Corporation:

i) Individual house Rs.1000/- per Sq. Ft.

ii) Flats/Apartments. Rs.750/- per Sq. Ft.

b) Other than Posh Localities:

i) Individual house Rs.750/- per Sq. Ft.

ii) Flats/Apartments. Rs.650/- per Sq. Ft.

The valuation of land shall be carried out by one of the HBFCL approved valuers and fee (s)/charges thereof shall be payable by the Builder as fixed by HBFCL.

15. Admissibility of Finance Facility

The admissibility of finance facility shall be worked out on the basis of declaration through affidavit of sufficient repayment capacity by the builder as an applicant/guarantor as the case may be, which shall, invariably, be verified/certified by the concerned Zonal Head.

16. Processing Fee

The following non-refundable processing fee shall be deposited by the builder in any authorized HBL branch at the time of submission of application for investment:-

a) Rs.15000/- for an investment upto Rs.5 Million.

b) Rs.20000/- for an investment above Rs.5 Million.

19. Ownership of the property

Plot(s) on which house(s)/flat(s) are to be constructed should preferably be in the personal ownership of the builder. Where the plot(s) is/are in the ownership of the builder’s spouse or children they can apply for grant of this facility in their own name on the guarantee of their father/husband (builder) or vice versa. 3rd party ownership of the plot shall not qualify for this facility.

20. Closing of Loan Account

The account will be closed immediately on full and final settlement of Corporation’s all outstanding dues.

D) Ghar Aasan (Flexi) Scheme :

The role of the House Building Finance Corporation Ltd remained everlasting for refurbishing the housing finance sector of the country. As-such, the Management of HBFC Ltd always remained eager to introduce prudent housing finance policies, according to market demands, to suit the need of the people of the country and to provide affordable housing finance facilities to play a much bigger role to become a socially responsible and commercially sustainable house financing entity of the country.

This product is based on the concept of Diminishing Musharaka and has four modules for the following purposes:-

(i)Purchase of a residential property

(ii)Construction of residential property

a. Residential construction on Applicant’s owned land;

b. Residential construction on applicant’s owned house(on   advance stage of Construction i.e. up to lintel level or Roofed)

(iii)Renovation of an existing residential property

(iv)Replacement of an existing housing finance (Balance Transfer Facility)

This scheme facilitates customer for purchase/construction/renovation/BTF of house/flats.

The salient features of the scheme are:-

Maximum Ceiling:

1- Financing facility up to Rs.7.5 million for purchase/construction/Balance

Transfer Facility subject to the customer’s eligibility & location of house/flat.

For renovation maximum financing limit up to Rs.2.5 million.

2- The investment is repayable in affordable installments over a maximum period

of 20 years depending upon the customer’s age and repayment ability.

3-The overall cost in acquiring housing under the scheme is moderate as compared

with other banks;

4-Early unit purchase option after the lock out period (lock out period means first 3

years during which advance units purchase to the customer is prohibited). After

lock-out period the customer can purchase as many number of units as the customer

wishes, once in a year subject to prepayment charges. By making advance

payment, the customer will avail two benefits i.e. get revised and reduced his/her

monthly installment on lower side or get reduced the period of loan.

5-Security: equitable/registered mortgage.

6-Sharia compliant scheme.

7-Hassle free repayment facility.

How To Apply:

Pre-requisite for Construction of house:

·Title to land

·Construction, minimum up to plinth with DPC

·Proof of incom

·Age

Procedure:

1. The Customer is required to visit concerned Representative or Branch Office along with all

original documents with a set of photocopies, CNIC, 3 Color Passport Size Photograph

(recent), Credit Card No. and NTN Number (if applicable).

2. The customer’s documents shall be scrutinized for compliance of the requirements

(target: same day).

3. The customer will be interviewed by the Branch Manager (target: same day)

4. The customer’s investment application will be registered after payment ofrequired

fee through payorder for which a computerized receipt will be given;

5. Legal scrutiny of title documents will be carried out by our Law Officer/Legal

Advisor/Advocate.

6. Customer Relation Officer (CRO) will record applicant's particulars in an application form

electronically and a copy of the same will be given to him/her to check the same. If the

same founds correct by the applicant, the signature of the applicant will be obtained

thereon.

7. The customer’s income will be verified by an authorized officer of HBFC Ltd.

8. Credit history will be checked through e-CIB, Data Check and NewsVis.

Proof of Income:

The customer is required to produce proof of his/her income which shall form basis for determining

his eligibility for a loan depending on his/her capacity .

Sanction of Investment:

By the credit committees at Zonal, Regional Office.

Steps after Sanction of Investment:

·Issuance of acceptance letter (The customer should carefully read the term of sanction letter and

give his/her consent by signing the document);

·Inspection of the house/flat/site by HBFC Ltd. authorized officer to check and ensure that the

stage construction is in accordance with thte specifications mentioned in the sanction letter.

·Photographs of the site will be taken.

·The 3rd Tranche shall invariably be released subject to satisfactory site inspection report of

stage of construction by the PBA approved valuers and on those locations where there are

no PBA approved valuers on the panel of HBFC Ltd, the site will be got inspected through the

representative of the Zonal Office, on the discretion of the Zonal Manager.

·Conformity of construction with approved building plan will be checked.

·The customer will be asked to give standing order/debit advice to the bank to debit his/her

account & transfer the monthly instalment's amount to HBFC Ltd's Collection Account. In

peculiar cases, where the Branch/Zonal managment is of the view that debit instruction is

not possible, the Provincial Chief & Zonal Chief will jointly allow the branch office to receive

PDCs (Post Dated Cheques) for collection.

·The customer will provide the insurance premium's paid receipt of advance 12/24 months as the

case may be.

·Promissory Note and Letter of Continuity to be signed by the customer.

·Undertakings by applicant(s), co-applicant(s) and guarantor(s) (as the case may be).

Release of HBFC Ltd. disbursement (i.e. HBFC Ltd. investment in the property):

On completion of above formalities, investment shall be released to the customer according to

the stage of construction in tranches/ installments according to the specifications of sanction

letter.

Equitable Mortgage:

100% equitable mortgage in the leasehold residential properties in large cities i.e. Karachi, Lahore,

Rawalpindi/Islamabad, Multan, Faisalabad, Hyderabad, Quetta and Peshawar subject to observance

of the following:-

1. Having sufficient market value with memorandum of deposit of title deeds.

2. Red entry on record of rights (where applicable).

3. Intimation to concerned sub-registrar and lease issuing authority with irrevocable General

Power of Attorney in favour of HBFC Ltd.

Registered Mortgage:

In rest of the areas throgh conventional method of Registered Mortgage Deed.

For purchase a house/flat Requirements:

· The facility of investment for the purchase of finished house will be available in Urban areas of

Tehsil and District Headquarters only.

The maximum age of the house having ‘A’ Class construction should not exceed 45 years

(countable from the date of approved building plan) i.e. a house aged 40 years shall be

admissible for investment up to maximum of 5 years.

Investment may be made at all coastal areas except for the front row of Sea View

Township and Darakhshan Villas, Clifton Karachi subject to submission of soundness

Certificate from the Pakistan Banks Association approved valuers.

Further at Tehsil level subject to the condition that the property intended to be purchased

is built with “A” class construction having all basic amenities of life. More-so, the value of

the house as per existing policy has been got valued from the PBA approved valuers.

House purchase facility is available in Urban Area at District Quarter/Tehsil subject to the

condition that construction should be “A” Class & all basic amenities of life should be

available.

Sale Agreement, Title Deed, Valuation and Soundness Certificate (as per format) from an

approved Architect will be required in addition to other documents.Investment shall be

released in one tranche/installment. The cheque shall be delivered to you in the

presence of Sub-Registrar at the time of execution of Islamic Housing Finance

Agreement.

Eligibility Criteria:

Age:

Age of applicant and co-applicant/guarantor must be minimum of 18 and maximum of 60 years.

However, maximum age allowed for self employed persons would be 65 years.

Co-Applicant / Guarantor :

Primary or three co-applicants/guarantors are allowed.Guarantor must be a family member and with an

inheritance rights in the property, to be mortgaged/assigned with HBFC Ltd.

In deserving cases i.e; cases of widows, divorces, issueless couples and unmarried women aged 30 and

above, the guarantees of other blood relatives, who do not have inheritable rights in the property, such

as brothers, sisters, other adult children (niece and newphew), son-in-law, daughter-in-law etc, may be

also accepted.

Race, Caste, Creed :

All Muslim or non-Muslim citizens of Pakistan, Azad Kashmir, Northern Areas.

Income :

The customer should be employed / self-employed and have sufficient repayment capacity to meet the

investment obligations;

Proof of income:

Salary Certificate, Affidavit, Tax Return

Property :

Either the customer possesses ownnership of the residential plot upon which house is intended to be

constructed or Addition of floors/additional rooms to the house is intended to be raised.

Purchase of house/ flat :

The vendor should have clear and marketable title free from all encumbrances and the house/flat

should not be more than 45 years old.House purchase facility is available in Urban areas of District

Quarters/Tehsil subject to the condition that construction should be "A" class and all basic amenities of

life should be available.

Maximum covered area :

No limit.

Financial Investment:

Locality Wise Investment CapingRepayment Period = Maximum 20 Years

Location Rural Area

In all Urban Areas including District Head Quarters,

Urban Areas of SUK / LAR / ATK / SWL / KSR / SKP /

Urban Areas of ABTTD / GRW / SKT /R.Y.KHAN /

Urban Areas of HYD /QTA / PSH

Urban Areas of KAR / LHR / MTN / ISL /

Tehsils & Small Towns

BWP / GRT / SGD

WAH CANTT RWP / FSBD

Investment Limit

Rs. 150,000/-

Rs. 1,000,000/- Rs. 1,500,000/- Rs. 2,500,000/-Rs. 5,000,000/-

Rs. 7,500,000/-

Profit Rates

(i) Variable Installment Plan (To be re-priced Annually)

15%

(ii) Fixed Installment Plan (To be re-priced every five years)

15.5%

Note:

(i) Insurance Premium @ 0.463 paisa per thousand per month.

Head Office:

HEAD OFFICE

Address:

3rd floor, Finance & Trade Centre,

Shahrah-e-Faisal, Karachi, PAKISTAN

Phone

92-21-9202301-05 - Toll free 0800 42325

Fax

92-21-9202360 & 9202319

References:

HBFC role in construction industry highlighted

www.hbfc.com.pk

KARACHI : Federal Housing and Planning Minister Syed Safwanullah has said that the House Building Finance Corporation has played a key role in promotion of construction industry in the country during the last half century and stressed the need for further strengthening of this organisation.

He was addressing as chief guest at the oath taking ceremony of HBFC Workmen Union of Pakistan and annual dinner held on Saturday night.Mr Safwanullah said that the objective of HBFC establishment was to provide housing facilities to the people of average and low income groups. “HBFC is not only a financial institute but also a welfareorganisation which supports the people belonging to average and low income groups,” he remarked and stressed that those taking loansshould also demonstrate a sense of responsibility in repaying the same so that more loans could be extended to the ones in need for building their houses.

Referring to the HBFC’s unpaid loans of Rs12 billion, he said if people would return this amount, the same would be used for provision of housing facilities to more people besides it would also generateemployment opportunities.

The federal minister pointed out that more than 40 industries were attached with construction related activities and therefore when aconstruction project was started employment opportunities were created for people associated with all these industries.

Earlier, HBFC Chairman Zaigham Mehmood Rizvi highlighted the performance of the organisation.

KARACHI: HBFC role in construction industry highlighted

KARACHI, Sept 10: Federal Housing and Planning Minister Syed Safwanullah has said that the House Building Finance Corporation has played a key role in promotion of construction industry in the country during the last half century and stressed the need for further strengthening of this organisation.

He was addressing as chief guest at the oath taking ceremony of HBFC Workmen Union of Pakistan and annual dinner held on Saturday night.Mr Safwanullah said that the objective of HBFC establishment was to provide housing facilities to the people of average and low income groups. “HBFC is not only a financial institute but also a welfare organisation which supports the people belonging to average and low income groups,” he remarked and stressed that those taking loans should also demonstrate a sense of responsibility in repaying the same so that more loans could be extended to the ones in need for building their houses.

Referring to the HBFC’s unpaid loans of Rs12 billion, he said if people would return this amount, the same would be used for provision of housing facilities to more people besides it would also generate employment opportunities.

The federal minister pointed out that more than 40 industries were attached with construction related activities and therefore when a construction project was started employment opportunities were created for people associated with all these industries.

Earlier, HBFC Chairman Zaigham Mehmood Rizvi highlighted the performance of the organisation.—APP

Rural Housing Finance Features

HDFC offers home loans in rural areas for:

Construction of Houses on plot owned by you

Addition of more rooms or floors to your existing house

Renovation & Improvement of your house

Purchase of a new house

Features

For Agriculturists:

If you are a farmer/planter/horticulturist/dairy farmer etc. having your own land and looking to have your own home, get in touch with us.Specially Designed Housing Loans for Agriculturists.Loan eligibility on the basis of land owned by you and the crops being cultivated.Housing Loan in residential area of your own villageLoans for buying house or flat in city of your choice...and many more.

For Salaried & Self Employed:

Everyone wants a place to call home, and then what better place than your village or town to own one.

Housing Loans for homes in rural areas for Salaried persons

Housing Loans for homes in rural areas for Self Employed Businessmen or Self Employed Professional.Interest Rate

Wef : 1st Aug 2011 RPLR: 16.50%

Applicable Rates(Monthly Rest Basis)

Fixed rates% Variable rates%Basis%RPLR

Upto and including Rs 30 lacs 12.25 10.75 RPLR - 5.75

Rs.30.01 lacs to Rs.75 lacs 12.50 11.00 RPLR - 5.50

Over Rs.75 lacs 13.00 11.50 RPLR - 5.00

The above rates are subject to change without notice.