A state government pensioner can borrow for a home loan but eligibility of the applicant will reduce. Most banks entertain loan applications only from pensioners who draw a pension from the same bank. Some banks allow to take home loans with them even though you are not drawing pension from the same bank. A pensioners chance of availing a home loan increases if you add a co-applicant. With a working individual as your co-applicant, you would also have a better chance of getting a higher loan amount. Having a good credit score will also increase your chances of getting the loan easily.
Having an asset in hand will always help, if you are planning to get a home loan. You can pledge your house as a collateral, while slowly paying off your loan. So incase you are not able to repay your loan, your lender will have the assurance of a collateral with them.
Additional Reading: 5 Personal Loans for Pensioners