Housing options available for low income earners

The Hillside view development in Bloemfontein. Credit: Facebook

Access to finance for the purchase of homes for low-income earners remains a problem for many, not only in the Free State but South Africa at large.

To mitigate this, the Free State Department of Cooperative Governance and Traditional Affairs (Cogta) has embarked on several projects to ensure that residents of the province who earn between R0- R15 000 have different rental and housing options.

This is according to Senne Bogatsu, the spokeswoman at the provincial Cogta department.

Breaking new ground
Bogatsu says: “Options we have made available to our communities include the Breaking New Ground houses, which are essentially what we used to refer to as RDP houses, only residents have different design options available to them as opposed to the former rectangular box designs that were offered. We have realized that different people have different tastes and so we have improved the aesthetic features of these houses to celebrate individuality among the residents and home seekers.”

Bogatsu says unlike the former RDP houses that were only between 20 – 34 square metres, these new, modern homes are 40 square metres in size, with two bedrooms, a separate bathroom with a shower and hand basin, one toilet and also a combined kitchen and living area. These homes are for households earning less than R3500.

What a Breaking New Ground (former RDP) house today looks like. Credit: Facebook

Finance Linked Individual Subsidy Programme.

Since its launch in 2012, the Finance Linked Individual Subsidy Programme (FLISP) has targeted first-time homeowners who earn between R3501 and R15 000. Individuals who qualify for this programme must be South African residents, must be above 18 years old, must have never benefitted from a housing subsidy and must also have an approved home loan from a financial institution.

“This programme is for those who are in what we call the ‘gap market’ and this basically refers to middle-income earners. Often people who fall in this bracket struggle with qualifying for a home loan as their income is regarded too little for houses in the private sector but also too much to qualify for government’s free basic housing,” Bogatsu explains.

She also adds with this plan, the less one earns, the higher the subsidy one will receive from the government. For example, someone earning between R3501 and R3700 will qualify for a subsidy of about R87 000, while another person earning anything between R11 101 and R11 300 will qualify for a subsidy of about R42 350.”

Once qualified and all due processes followed, the subsidy gets paid into the bond, thereby reducing the total loan amount to be paid off by the homeowner. Meaning, as in the above-mentioned examples, if an R3501 earner receives an R87 000 subsidy on an R 300 000 home loan, he or she will only pay R213 000 towards his or her debt on the home loan. Those who qualify for this plan have the option of buying a new or an existing home, buying a vacant stand or also building their home from scratch, provided the amount does not exceed R300 000.

For more information on this programme, visit www.fscogtahs.gov.za or call 051 405 3311/4400.

Low-income rental options

“Then we also offer rental options because not everyone can afford to own a home or some people prefer to rent,” Bogatsu adds.

She adds that a few old hostels in the Free State have been refurbished and redeveloped to provide low-income rental options. “These facilities are available for people who earn between R1622 and R7500 per month,” she says. She also adds that these rentals are heavily subsidized by the state and that rental rates start from as low as R540 per month for a bachelor flat and can go up to R2250 for a three-bedroom flat.

Bogatsu warns that if applicants happen to earn money above the rental threshold while renting one of these state owned flats and Cogta finds out, they will either pay market rates for the flat or be asked to move out and find accommodation from the private sector.

Upcoming developments members of the Bloemfontein community can look forward to including the Dark and Silver City development, which is still under construction, as well as the Hillside View development, which is also still under construction.

She adds that the department has not yet allowed for interested parties to put their names on a waiting list and closer to the time when this will be done, Cogta Free State will use various forms of media to call onto members of the public to do so.

For more information on all the above-mentioned housing alternatives, call the Free State Social Housing Company (Freshco) offices in Bloemfontein at 051-430-2687.

The ongoing Dark and Silver City development which will offer low cost housing for Bloemfontein residents as soon as it’s been completed. Credit: Facebook

Pulane Choane- Courant News