LINE UP: Police officers, nurses and teachers
The government’s mortgage default insurance (MDI) scheme, aimed at helping lower-income earners own their own homes, will start operating in the new financial year, it was announced on Tuesday.
The R1 billion scheme would initially apply to police officers, nurses and teachers, Deputy Human Settlements Minister Zou Kota-Fredericks told reporters at Parliament.
“We have not quantified in terms of numbers, but we know exactly what category [of people] we are talking of — police, nurses and teachers,” she said.
“Professionals who [earn] between R3,500 and R15,000 a month. That is the area we are focusing on at the moment.”
The MDI, managed by the National Housing Finance Corporation, is essentially a guarantee fund to encourage banks and the housing sector to advance mortgage loans to those who might otherwise not qualify for such loans.
It fills the gap between those who qualify for government housing subsidies and those who earn enough to qualify normally for a home loan.
Kota-Fredericks conceded that the R1bn “won’t be enough” to accommodate all would-be home buyers, but suggested that once the scheme was up and running successfully, it could be expanded.
According to notes distributed at the briefing, the MDI will allow people who earn between R3,501 and R15,000 a month to “access a subsidy from the provinces of up to R83,000”.
This would enable them to secure housing finance of up to R300,000 from an accredited bank.
The MDI would “mitigate the default risk” on mortgage loan repayments to the banks.
Who will gain from government's home loan plan
LINE UP: Police officers, nurses and teachers
The government’s mortgage default insurance (MDI) scheme, aimed at helping lower-income earners own their own homes, will start operating in the new financial year, it was announced on Tuesday.
The R1 billion scheme would initially apply to police officers, nurses and teachers, Deputy Human Settlements Minister Zou Kota-Fredericks told reporters at Parliament.
“We have not quantified in terms of numbers, but we know exactly what category [of people] we are talking of — police, nurses and teachers,” she said.
“Professionals who [earn] between R3,500 and R15,000 a month. That is the area we are focusing on at the moment.”
The MDI, managed by the National Housing Finance Corporation, is essentially a guarantee fund to encourage banks and the housing sector to advance mortgage loans to those who might otherwise not qualify for such loans.
It fills the gap between those who qualify for government housing subsidies and those who earn enough to qualify normally for a home loan.
Kota-Fredericks conceded that the R1bn “won’t be enough” to accommodate all would-be home buyers, but suggested that once the scheme was up and running successfully, it could be expanded.
According to notes distributed at the briefing, the MDI will allow people who earn between R3,501 and R15,000 a month to “access a subsidy from the provinces of up to R83,000”.
This would enable them to secure housing finance of up to R300,000 from an accredited bank.
The MDI would “mitigate the default risk” on mortgage loan repayments to the banks.
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