Get more Mail & Guardian
Subscribe or Login

Mortgage Default Insurance to boost affordable housing

With a large number of South Africans not qualifying for home loans from the commercial and private banking sector, while also not qualifying for the State-funded subsidy housing programme, the introduction of a mortgage default insurance product is timely.

This will go a long way in ensuring that risk sharing with lenders takes place, while addressing the housing finance needs of the low to middle income households.

In his State of the Nation Address in February 2010, President Jacob Zuma announced government’s plans to set up a guarantee fund of R1 billion to incentivise the private banking and housing sector to develop new products to meet the housing demand in the country.

This was later followed with an announcement by Minister of Human Settlements, Honourable Tokyo Sexwale, where he mentioned that the NHFC, through its Mortgage Default Insurance Programme (MDI) would serve as an optimal means of utilising the R1-bn government guarantee.

Committed
The NHFC has maintained a clear line of sight of government imperatives to compliment the housing finance market endeavours, to improve access to affordable housing. Chief Executive Officer, Mr Samson Moraba says “the MDI programme is at an advanced stage of development and at different levels of engagement with relevant stakeholders”.

MDI is a form of credit insurance that protects a lender against the default risk of a residential mortgage borrower. Thus, largely the underserved segments of the housing market — first-time home buyers, professionally self-employed, public servants and other lower-income households — would have a greater ability to access affordable mortgage finance.

“In line with public policy, this product will go far in expanding the number of low to middle income households that can access affordable housing, on a commercially sustainable basis”, Moraba concludes — Issued by: National Housing Finance Corporation (NHFC)

This article originally appeared in the Mail & Guardian newspaper as a sponsored advertorial

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Advertorial
Guest Author

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

Hawkish Reserve Bank sees South Africa edge towards a rates...

Analysts say the Reserve Bank could start tightening monetary policy as early as next month

Coko vs S ruling: The case against a subjective test...

Acting judge Tembeka Ngcukaitobi’s acquittal of a rape suspect has raised controversy, but legal experts say the fault lay with legislators and not the court

More top stories

Almost 7 000 children receive Pfizer shot on first day...

More than 39 000 young people had registered on the government’s database by 4pm on Wednesday

Police murder trial: 189 metal pellets killed Nathaniel ‘Lokkies’ Julies

At least 65% of the pellets in the cartridge hit the 16-year-old when he was gunned down in Eldorado Park, Johannesburg, allegedly by in-training constable, Caylene Whiteboy

Hawkish Reserve Bank sees South Africa edge towards a rates...

Analysts say the Reserve Bank could start tightening monetary policy as early as next month

Lucas Radebe: ‘My football career began behind my parents’ back’

Soccer legend Lucas ‘Rhoo’ Radebe is a busy man, but he made time in his hectic schedule to speak to Ntombizodwa Makhoba about his fondest childhood memories, how his soccer career began, and, as a father of eight, his legacy
Advertising

press releases

Loading latest Press Releases…
×