Question NW3696 to the Minister of Human Settlements
11 December 2023 - NW3696
Tseki, Mr MA to ask the Minister of Human Settlements
Whether the memorandum of understanding between the National Housing Finance Corporation and the Department of Public Services and Administration has been signed regarding the Government Housing Scheme, which will make non-mortgage financing available to lower income government employees and give them access to First Home Finance to purchase houses in both urban and rural locations; if not, why not; if so, what total number of government employees are anticipated to gain from the revised First Home Finance policy?
Reply:
a) Whether the memorandum of understanding between the National Housing Finance Corporation and the Department of Public Services and Administration has been signed regarding the Government Housing Scheme, which will make non-mortgage financing available to lower income government employees and give them access to First Home Finance to purchase houses in both urban and rural locations.
Yes, the National Housing Finance Corporation and the Department of Public Services and Administration signed the Memorandum of Understanding in November 2021. The Primary objectives of the MoU are to:
- Establish a relationship that will enable qualifying government employees’ access to First Home Finance subsidies.
- Strengthen the contribution of First Home Finance towards leveraging increased home loans to government employees.
- Increase home ownership among government employees.
- Ensure a co-ordinated approach in marketing First Home Finance to government employees.
- Establish the basis of interaction between the parties.
The MOU does allow Government Employee Housing Scheme (GEHS) members to access First Home Finance subsidy with non-mortgage products to purchase or build homes in both urban and rural areas.
b) If so, what total number of government employees are anticipated to gain from the revised First Home Finance policy?
According to the June GEHS report, as at the end of June there were 204 650 potentially qualifying employees. This number reduced from 319 440 as at the end of March 2023, because of salary adjustment that became effective on 1 April 2023 that resulted in a number of employees in Salary Level 7 and upwards earning a gross income above R22 000 per month; and therefore, ineligible for First Home Finance subsidy. This number reflects total employees in Salary Levels 1 up to 6 because their monthly gross income falls within the R22 000 upper limit for First Home Finance.
The MOU signed between the DPSA and the NHFC was on the implementation of FLISP, which was later rebranded to First Home Finance. The MOU was signed based on the then draft revised FLISP Policy and is being implemented.
The aspect that includes the NHFC, DPSA, NDHS and NT pertains to the NHFC assuming a bigger role of providing certain GEHS services for the benefit of government employees is still in the process.