Real Estate Investor Magazine South Africa September/ October 2019 | Page 17

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Finance Linked Individual
Subsidy Programme (FLISP)
FLISP was developed to enable individual first–time
home-ownership to households in the ‘affordable or gap’
market, that is, people earning between R3 501 and R22 000
per month. Individuals in these salary bands generally find it
hard to qualify for housing finance; their income is regarded as
low for a home loan (mortgage or pension/provident backed
loan), but too high to qualify for the government ‘free-house’
subsidy scheme.
Depending on the applicant’s gross monthly income, their
once-off FLISP subsidy qualifying amount may vary between
R27 960 and R121 626, as defined in the FLISP Subsidy
Quantum.
FLISP - Subsidy Quantum
Example 1 is based on an R9 000 per month income-band,
where the individual after the Lender/Bank’s credit and
affordability assessment, based on the National Credit Act
(NCA) criteria, qualified for a R300 000 home loan:
FLISP reduces the home loan (mortgage or pension/
provident backed loan) amount to render the monthly loan
repayment instalments affordable; (payment made to home
loan account)
Property Price
R300 000
Bank HL Approval
R300 000
Less FLISP as a deposit
R93 526
Eventual Home Loan Amount
R206 474
For more information: www.flisp.co.za
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The Housing Impact Fund South
Africa (HIFSA)
The Housing Impact Fund South Africa (HIFSA) is
a development impact fund managed by Old Mutual which
seeks to provide commercially viable investments into the
affordable housing sector.
HIFSA finances:
•
The acquisition and construction of homes for sale
and rent that are affordable to the lower and middle
markets (households earning less than R20 800 per
month
•
Housing loans rental accommodation for families and
students
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AFFORDABLE ACCOMODATION
Human Settlements Develop-
ment bank (HSDB)
The Human Settlements Development Bank
(HSDB) is managed by the national government to finance the
construction of more affordable housing stock in South Africa.
The HSDB will leverage both public and private sector
financing and supplement other aids in the delivery of housing.
It is primarily intended to:
•
Support construction financing for government-led
integrated housing projects in urban areas
•
Facilitate the increased provision of the FLISP to
qualifying beneficiaries in the gap market, including
the Government Employee Housing Scheme
For more information banking.org.za
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Chartwell
Chartwell is a residential real estate investor and
home loan provider.
Chartwell focuses on:
•
Development of comprehensive feasibility studies
and raising the optimal mix of funding
•
Raising equity finance
•
Raising infrastructure finance, which include3s the
structuring of public-private partnerships with local
and international governments
Chartwell looks to acquire both existing and turnkey
developments from contractors and developers on a bulk
basis.
•
Located in Gauteng, Cape Town, Durban and the
surrounding metropolitan areas
•
Market value of between R500,000 – R1000,000
•
Minimum of 100 units up to a max of 250 units in any
given development
For more information www.chartwellgroup.co.za
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Traditional Banking sector
Investment activity HIFSA has financed:
•
South Point Properties, with over 5 000 student rental
accommodation units including Cape Town
•
Pulse Urban Properties which refurbishes buildings
for student accommodation (3 772 student beds and
1 407 residential units across 70 buildings) The Financial Sector Code requires banks to provide
funding or loans for affordable housing consumers
earning a gross income between R3 500 and R24 300. Banks
also providing funding for investors seeking to develop
affordable housing.
Many of the banks also have specific funds dedicated to
funding affordable housing.
These include:
•
Nedbank Corporate and Investment Banking (NCIB)
has partnered with South Africa’s Green Fund to create
a Sustainable Affordable Housing finance facility
•
Absa bank has an affordable housing (Commercial
Property Finance) unit, which has seen healthy returns
on affordable housing investments
For more information ww2.oldmutual.co.za For more information go to nedbank.co.za; absa.co.za
The fund invests in all aspects of the housing value chain,
from the physical development of housing through to
mortgage and incremental housing finance.
SOURCES: Greater Tygerberg Partnership; City of Cape
Town; National Housing Finance Corporation; City of
Johannesburg; TUHF; JDA; AHIS
SA Real Estate Investor Magazine SEPTEMBER/OCTOBER 2019
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