This study, carried out by AASA Consulting, was initiated through a research grant given by Citi Foundation to Acumen Fund Pakistan. Undertaken over a period of ten months, this Study, based on 582 questionnaires, backed up by focus group discussions, tries to assess, quantify and understand, factors which affect housing and housing finance demand for low income urban groups in Karachi, Lahore and Faisalabad. The main objectives of the Study were: (1) to better understand low-income customer demand for housing and housing finance products, (ii) determine the current supply of low cost housing finance, and (iii) what are the key barriers to supply of affordable housing finance. Four principle findings emerged from this study:  Demand for Housing: Willingness to Acquire Loans A major finding from the Survey about the willingness to acquire loans by respondents showed that more than half the respondents wanted to acquire a new loan, and for a very large proportion of these, the main purpose for getting a loan was to purchase a house or to have their existing house repaired. Over 50 percent of both owners and renters wanted loans; for owners who wanted loans, 62 percent wanted loans for house repairs; for renters who wanted loans, 61 percent wanted loans to build a house. As many as 75 percent of owners wanted to repair, renovate or undertake additional construction of their existing houses, indicating that a potential market of home owners who might need credit, exists. Almost half of the owners wanted to take a loan for addition, renovation & repair, ranging between Rs 100,000-300,000, and were looking at a payback period of, on average, 8 years, with a monthly instalment of between Rs 3,000-5,000. While longer time horizons are not preferred (10-15 yrs), shorter time horizons for a housing finance product were acceptable (on average 3-7 yrs). Additionally, while the precise interest rate that is feasible for this income segment is variable from city to city and based on exposure, there is clearly an understanding and acceptance of the concept of an interest rate (service charge, mark up, fee, etc.). What that service charge or markup fee should be, varies within different segments of the income group, by owners/renters and by salaried/non salaried, In practice, low-income groups tend to be more price sensitive to longer tenor loans.