Naya Pakistan Housing Program: An Analytical Study of Mortgage-Backed Security Model and Legal Framework for Low-Cost Accessible Housing Scheme in Pakistan

PakistanPakistan isNaya currentlySecurity facingAccessible Housing an urban housing shortage of near four million mostly in low and lower-middle-income segments of the society. Almost every governmentGovernment has endeavoured to cope with this deficiency by introducing various models of conventional and Islamic financial products for home financing. Despite all the efforts of the state, the shortfall not only exists today but has increased manifolds, as the population is much inclined to urban life owing to various reasons. These products include, but are not limited to, home financing through the lease-based model, diminishing mushārakah and murābahah to the purchase order. Recently, the GovernmentGovernment of PakistanPakistan led by Chairman Tehreek-e-Insaf has also announced its pilot project of NayaNaya PakistanPakistan Housing Program (PHP) which claims to provide a low-cost and accessible housingAccessible Housing facility to low and lower middle class of the society. This research work undertakes to analyse the existing models of financial products for home financing, including the proposed Mortgage-Backed SecuritySecurity Model, to check their propriety and suitability for NPHP. It also elaborates the legal framework for low-cost accessible housingAccessible Housing in PakistanPakistan under this pilot project of the PTI governmentGovernment. This paper finds that utilization of Mortgage-Backed Sukuk can represent an effective form of cheaper long-term financing. This study argues that effective foreclosure laws enhance the recovery rates from the borrower by the lender. Finally, this study suggests the establishment of a strong mortgage finance industry in PakistanPakistan to achieve the undertaking of the PTI governmentGovernment of providing 5 million houses.