In developed economies, housing is a key economic activity that mobilizes around 40 sectors. The modernization process underway in the housing sector is closely linked to developing decentralization and privatization policy and the participation of public bodies concerned. The success and effectiveness of this modernization process are directly concerned with institutional strengthening including training and capacity building in order to improve the standard of housing and consequently raise the living standard of the people. It is thus expected that housing in Khyber Pakhtunkhwa will become a major investment activity. The project is designed to assist the department in making the transition. The project is consistent with the objectives of providing housing for all enunciated in the National Housing Policy 2001.