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FNB grows affordable housing lending to help first time home buyers

57% Retail customers qualified for FLISP with estimated potential value of R100 million.

FNB has grown its affordable housing property lending book by 24% (R6.3 billion) year on year to help entry-level first-time buyers with owning a home. Of the concluded mortgage deals in the income range R3,501 to R22,000, we estimate that 57% of FNB Retail customers qualified for the government’s Finance Linked Individual Subsidy Programme (FLISP), with the potential of benefitting first-time buyers to the value of R100 million.

Despite this, only a small fraction of these customers actually took up FLISP as part of their home purchasing journey. 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.

FLISP is a government home ownership assistance programme for households that fall within the ‘gap housing market’ whose income is between R3 501 – 22 000. These households do not qualify for Government’s free housing programme and do not earn enough to afford an entry level housing unit in the market. FLISP can be used as a cash contribution or deposit to supplement an approved home loan, and it reduces the overall outstanding balance and monthly repayments for the consumer.

Raj Makanjee, CEO of FNB Retail says, “Home ownership is a life changing experience for families, and it is often the single biggest financial investment that most families will ever make. As a result, we are humbled to continue enabling home ownership for individual customers and families that bank with us. 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.”

Lee Mhlongo, CEO of FNB Home Finance, says, “Despite Covid-19 related challenges which affected the broader housing market, the affordable housing market remains resilient and attractive to home buyers. Interventions like FLISP supplement our own 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.”

“There is an increased need for an inclusive approach to address the affordable housing challenges including community participation and stakeholder engagement, while considering the broader socioeconomic, cultural and spatial impact of housing development. We’re committed to walking this journey of home ownership with our customers as part of our best endeavours to help every family to own a home,” adds Mhlongo.

FNB customers can apply for a pre-approved home loan via the Bank’s digital channels including the FNB App, call the banks service suites or visit one of the branches to start their home journey. The Bank also assists approved first-time home buyers who meet the FLISP criteria to apply for the benefit. The FLISP requirement is that the customer must have an approved loan, be a South African citizen, first-time beneficiary of a government housing subsidy and have financial dependents.

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