Bid to help lower earners get home loans

LOW and middle-income earners might just be able to buy their own homes if a partnership between the government and the banking sector is formed.

Human Settlements Minister Tokyo Sexwale said this after a meeting with the chief executives of some of the country's major banks and the Banking Association of SA at Johannesburg's Constitution Hill yesterday.

The government is proposing to put aside R1billion in a guarantee fund that will help those who could not secure home loans to buy houses. This market includes nurses, teachers, police officers and lower level managers.

Sexwale said those who earned less than R3000 a month qualified for housing subsidies and housing grants from the government but those who earn between R3500 and R9000 did not qualify for housing grants or bonds from banks.

The fund will also be able to help should a bondholder lose their job and be unable to continue paying their bond.

He warned banks not to give credit to those who could not afford to pay for their loans.

Managing director of the Banking Association of South Africa, Cas Coovadia, said: "We have committed to the minister that we are more than willing to put on the table the experience and expertise of banks in helping to structure the guarantee fund to be efficient and achieve its objectives."