Service Quality plays vital role for customers to decide which product and service they want to avail and how the product and organization is performing. Customer satisfaction is qualitative phenomenon in nature so it can be measured through quality of the services. Service quality will help an organization to realize how they can intervene and gain competitive edge in the market. The organizations are using structured quality management principles, tools and techniques to gain trust of the customers. Housing sector also comes under the services and manufacturing sector of Pakistan. The housing and construction has also been increased the business of other linked industries. Provision of Quality housing services for public is also a challenge for the many of the governments around the globe. They are doing their best to deliver quality services to their customers in order to gain their satisfaction. To keep pace of growth and competitive edge, organization requires efficient, committed and highly skilled management professionals to cope up with these challenges. This study intends to probe the service quality leading to customer satisfaction of housing services in public sector (Pakistan Housing Foundation) 1. A customized SERVQUAL model has been used to evaluate the service quality of housing services by Public sector organization based on the resident’s perceptions. The total sample size consists of 150 flat (houses). Pakistan housing Authority (PHAF) is the unit of analysis. Factor analysis and multiple regression techniques have been used to identify the relationship among service quality of housing services and customer satisfaction of residents. The results are significant, showing that service quality of PHA is of satisfactory level.