GOVERNMENT’S new financial aid scheme, which could see low-income earners benefit from massive discounts on new homes, is set to be launched in Nelson Mandela Bay next month.
The scheme, administered by the National Housing Finance Corporation (NHFC), would see prospective home buyers who earn between R3500 and R15000 a month granted a subsidy ranging from R10000 for higher earners to R87000 for lower earners.
This was announced by President Jacob Zuma in his state of the nation address in February.
The Walmer Link affordable housing project along Buffelsfontein Road is the first pilot housing project in the Eastern Cape for the gap market, which is typically people who earn too little to qualify for a home loan and too much to qualify for an RDP house.
NHFC general manager Adelaide Mohale said they had hoped to officially launch the project at the end of the month, but due to the recent heavy rains in the Bay, it had been postponed to the middle of next month.
The launch will also mark the opening of applications for the Finance Linked Individual Subsidy Programme (Flisp) subsidy.
"Six show houses will be ready to be viewed by interested people. They will be of different typologies to showcase that there are different houses to suit your pocket.
"We are waiting to get the Flisp budget that is available for the Eastern Cape. Depending on the budget, we will be able to accommodate individual applications ... The budget will be linked to the subsidy applications, but the province must still state what budget is available,” she said.
The Flisp subsidy will act as a discount for home-loan applicants, and only units selling for R300000 or less can be purchased.
While the subsidy would initially only be linked to housing projects, meaning interested applicants could not purchase houses elsewhere, Mohale said it would eventually be opened up to those wanting to buy in other areas.
"It’s the first phase, which is the pilot phase, so it is project-based. But that doesn’t confine people to the project. It just means that for now, as a pilot, we are using the project as a testing policy,” Mohale said.
In the meantime, prospective home buyers would have to work through the housing project developer, who would assist in filling in an application to be submitted to a bank. The developers have to be registered with the NHFC.
Mohale said the Flisp subsidy would reduce the bond loan amount to make the monthly loan repayment instalments more affordable.
"People who are interested would have to approach the developer to assist with the applications, which must be submitted to the bank with their loan applications.
"We won’t, however, be able to influence banks’ lending policies and how much they are willing to risk.
"Only if, or when, the bank has approved the home loan application can the applicants apply for the Flisp subsidy,” she said.
"The [human settlements] MEC must appoint the NHFC as the implementing agent for Flisp and [we] get to assess the applications and make recommendations to the MEC, who will have to sign the approval. We envisage the process to take about two weeks.”
The NHFC hopes to roll out about 149 houses at Walmer Link by the end of the year and 310 units next year.
The Walmer Link housing project currently comprises 347 apartments available for rent.
Rental is income-based, ranging from R800 to R2500 per month.
The income limit for tenants is between R1500 and R7500.