Home / General / FNB increases its affordable housing lending to help first-time home buyers

FNB increases its affordable housing lending to help first-time home buyers

Posted on March 14 2021 by Gert Minnaar in General

In a bid to help first-time home buyers own homes, financial services FNB has announced it has grown its lending book for affordable housing.

The lending book was increased by 24% (R6.3 billion) year on year of the concluded mortgage deals in the income range of R3 501 to R22 000. Last year the lending book was R23.9 billion.

FNB chief executive Raj Makanjee said, “Our dedicated focus to helping customers in the affordable housing income bracket is part of our holistic approach to assisting customers with all areas of money management. Over the years, we have been offering 100% home loans to qualifying customers in the affordable income category.”

FNB Home Finance chief executive Lee Mhlongo said that while the coronavirus pandemic challenges affected the broader housing market, the affordable housing market remained resilient.

“Interventions like Finance Linked Individual Subsidy Programme supplement our efforts to ensure that every family can own a home. The benefit of a cash contribution from a programme like FLISP can significantly reduce the financial burden on households.

“Unfortunately, most consumers are often unaware of benefits like FLISP, as a result, we take it upon ourselves to educate our customers on sources of funding during home buying,” said Mhlongo.

FLIPS was introduced by the department of settlement to help consumers earning between R3 501 and R22 000 a month supplement their subsidy.

The consumers are referred to as the “affordable” or “gap” market. They don’t qualify for the free government housing subsidy and their income is too low to qualify for the bank’s subsidy.

To qualify for the FLISP, the bank needs to approve a housing loan, and the applicant must be a South African citizen, the first-time beneficiary of a government housing subsidy, and have financial dependants.

The bank said it estimated that 57% of FNB Retail customers qualified for the FLISP, and first-time home buyers would have benefited R100 million.

The bank said while FLISP was available, only a small number of customers used FLISP when buying a home.

“This small take up is as a result of the challenging process to take up FLISP which results in property practitioners not prioritising deals linked to FLISP.”

The bank said it assisted approved first-time home buyers who met the FLISP criteria to apply for the benefit.

– By Dieketseng Maleke on 12 March 2021