Monday, December 7, 2009


Government through its housing subsidy programme assists people with very low salaries to buy houses. Many people however are not sure how to access this assistance, so I thought that this original article by Denise Mhlanga would be helpful.

I would like to help my employee who lives in a shack buy a simple house in Cape Town. Could you please tell me more about government's housing grants and where one can go to for subsidy application?


The Housing Subsidy Programme provides financial assistance to poor people, enabling them to buy decent houses. According to Louella Lekgetha, deputy director of Subsidy Administration at the Gauteng Provincial Government, the national housing programme was introduced post 1994 called the Housing Subsidy Scheme.
She said the grants were then R9 500 with an escalation of 10% serving as cushion against the ever rising building costs.

"The establishment of these grants were aimed at providing land and houses to the poorest households in the country," said Lekgetha.

Lekgetha said first-time buyers in the low-income earning group can access housing subsidies through their local housing department. The subsidy could be used to buy an existing house, including the property on which the house stands.

It can only be given to an individual once and is not given to the applicant as cash but is paid directly to the financial institution or conveyancing attorney.
The housing subsidy is not a loan. An individual does not have to pay it back.
People earning salaries of up to R3 500 are granted housing subsidies of R44 000.
She said people from this category do not qualify for mortgage finance and lending institutions. It is for this reason grants are not paid back.
For individuals earning between R3 500 and R7 000, grant subsidies are reduced.
If the amount they will be given is not enough for the property they are purchasing, they will then attach the subsidy amount to mortgage finance.
As an example, Lekgetha said a salary of R3 501 to R3 600 has a subsidy grant of R28 090 while that of R3 601 to R3 700 has a subsidy grant of R27 931.

Requirements for subsidy grants
  • An applicant has to be a South African citizen at least 21 years of age.
  • They should not have benefited from government assistance in buying any property and should not own a fixed property at the time of application.
  • Single people with financial dependents are eligible to apply for the subsidy grant as married or co-habiting couples.
To apply for the subsidy grant, applicants should go to their local housing departments with their personal documents which include: green bar-coded identity document, marriage certificate (where applicable), dependents' identity documents or birth certificates, and recent payslip which is not older than six months.
There will be application forms to be filled in, which will assist the department of housing to assess and set terms of the subsidy qualifying criteria - such as how much money the grant will amount to, based on earnings.

Nedbank Corporate Property Finance, through its Affordable Housing Division, assists many people.

Jeff Lawrence, head of Nedbank Retail's Affordable Housing Home Loans Division said Nedbank funds affordable housing developments in most metropolitan areas in South Africa where a tangible need for affordable housing has been demonstrated. Nedbank recently funded new affordable housing developments in the Soshanguve area, where 775 homes will be built.

Lawrence said affordable housing will mostly fall below the R350 000 range.
Information can be obtained at any Nedbank branch, or visit the Nedbank website and selecting the home loans option at or telephone the call centre on 0860 555 111.
Alternatively, employees can contact me directly and I will direct them to the necessary assistance. My website is at

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