This project paper seeks approval of the World Bank Board of Executive Directors to provide a credit in the amount of EUR 75.1 million (US$85 million equivalent) for a proposed Additional Financing of the Pakistan Housing Finance Project (parent project—P162095). Additional Financing (AF) is being proposed to increase access to housing finance for low- and middle-income households and to support the development of capital markets in Pakistan. The AF will fund the initial capitalization of a subtract (Risk Sharing Facility-phase 2) of the pilot Risk Sharing Facility (RSF) under the parent project, which provided the initial capitalization of this RSF. This is aligned with the Government of Pakistan’s (GOP) increased policy focus on this area. The proposed AF will be directly channeled through the Recipient, but the operation of the RSF will continue to be managed by the existing implementation agency, the Pakistan Mortgage Refinancing Company (PMRC). The proposed AF does not entail changes to the original Project Development Objective (PDO) nor the safeguard policies applicable to the parent project. The AF does, however, include a level-2 restructuring of the parent project, which is expected to entail the cancellation of one component and revisions to the results framework, including the revision of one PDO indicator, the addition of an intermediate indicator, and the revision of end targets. The proposed restructuring is also expected to include the dropping of one implementing agency (Planning Commission) and canceling leftover funds (SDR 419,627) due to the proposed cancellation of one component.