This article will tell you about the largest part of the Apna Ghar Apni Chat Scheme: Execution Model 3. If you own a plot but need financial help to build, this is the program designed for you, that covers 70,000 of the 100,000 total units.
📌This is one of three execution models. To understand the others, like building on state land, read the complete details in our guide to the Apna Ghar Apni Chat Scheme.
What is Execution Model 3?
Model 3 is an interest-free financing facility for eligible citizens who own a residential plot but lack the construction funds. The government of Punjab provides a loan to construct the house, coupled with a massive subsidy.
Important Financial Benefits of Model 3
| Government Subsidy | 60% of the construction cost is covered by the government. |
| Interest-Free Loan | The remaining 40% is provided as an interest-free (Qarz-e-Hasna) loan. |
| Monthly Installment | You repay the 40% loan in easy monthly installments, estimated to be around PKR 26,000. |
| Repayment Period | The loan is spread over a comfortable 5-year (60-month) period. |
| Additional Costs | The government covers all operational costs, taxes, and markups. |
How Model 3 Works: The Step-by-Step Flow
- Application & Eligibility: You apply and are found eligible based on the standard eligibility criteria.
- Land Verification: Government officials verify your land ownership and plot size.
- Approval & Sanction: Your case is approved under Model 3, and the loan & subsidy are sanctioned.
- Construction: The government (through its partnered agencies/contractors) constructs the house on your plot.
- Handover & Repayment: The completed house is handed over to you, and you begin the monthly installment payments.
Why is Model 3 the Best Option for Plot Owners?
- Zero Interest: You only pay back the principal amount, saving you a significant amount of money compared to a commercial bank loan.
- Significant Subsidy: The 60% direct subsidy is a huge financial grant that makes construction affordable.
- Fast Construction: The government manages the construction process, ensuring quality and timely completion.
Frequently Asked Questions
Q: Is the complete loan really interest-free?
A: Yes, the government explicitly states that the loan component is interest-free and that they will cover all associated markups and costs.
Q: What is the exact monthly installment?
A: The exact amount may vary slightly based on the final construction cost of the particular house model, but it is officially projected to be approximately PKR 26,000.
Q: What happens if I cannot pay the monthly installment?
A: The scheme is made for affordability. However, defaulting on payments could lead to penalties or legal action as per the loan agreement. It’s crucial to ensure you can manage the monthly payment before applying.
🗺️ Want to know if this model is available in your district? Check the city-wise quota distribution for the AGAC scheme.
