Tito Mboweni allocates nearly R1bn to help thousands buy their own homes
Treasury will provide relief for thousands of people who are too rich to qualify for government-subsidised housing but too poor to qualify for a home loan.
In his budget speech on Wednesday, finance minister Tito Mboweni said government will provide R950m over three years as part of its "Help to Buy" subsidy to help first-time buyers purchase a home.
In its budget statement, Treasury said the subsidy scheme will ensure that 18,185 households can obtain subsidies to access mortgages.
"There is not sufficient provision of housing finance for individuals who earn too much to qualify for a fully subsidised house but too little to qualify for a home loan," Treasury said in the budget statement on Wednesday.
It said that to reduce the cost of mortgage finance and streamline administration and the interaction between subsidy beneficiaries and banks, the administration and funding of the finance-linked individual subsidy programme will be shifted from provinces to the National Housing Finance Corporation (NHFC).
Before the new allocation, funds were allocated to the department of human settlements' Finance Linked Individual Subsidy Programme (Flisp).
The Flisp enabled first-time home ownership opportunities to SA citizens who earned between R3,501 and R15,000 a month.
The aim of the programme was to reduce the initial mortgage loan amount to render the monthly loan repayment instalments affordable over the loan payment term.
Treasury said the Rural Housing Loan Fund and the National Urban Reconstruction and Housing Agency merged with the NHFC in October last year.
The merger was designed to improve efficiencies, economies of scale and a more sustainable housing finance model.
In addition, Treasury said a dedicated informal settlements upgrading partnership grant of R14.7bn is expected to be introduced in 2010/21.
The grant will be for provinces and metropolitan municipalities and these funds are expected to enable the upgrading of 231,000 households in informal settlements.
Treasury also allocated R150m over three years to 117 municipalities with technical assistance for the development of 766 settlement upgrading plans.
It has also allocated money to help municipalities facing natural disasters.
“As a rapid response mechanism for the provision of temporary shelters in emergencies such as fires and floods, R1.4bn over the medium term is allocated to the provincial and municipal emergency housing grants,” Treasury said in its budget statement.