Low Income Housing Loan from Ooba - 06-25-09

June 25 - Wizard Finances, part of the Ooba Group, has recently finalized an agreement with the National Housing Finance Corporation which would assist lower and middle income groups in obtaining housing loans. The unique concept of these housing loans is that there would be no deposit required.

It is known that the lower income groups in South Africa have a harder time finding home financing on terms that are suitable to their financial situation. Rhys Dyer, COO of the Ooba Group said that the banks generally focus on the higher income groups and do not pay enough attention to this large sector of the economy.

"With the escalation of the scale of housing delivery in this market, the low income housing market is becoming viable," said Dyer.

The National Housing Finance Corporation (NHFC) was established a number of years ago by the Department of Housing in order to make affordable housing finance available to the lower income groups. Their aim is to widen the number of lower and middle income families who can manage the terms of a housing loan.

The retail division of the NHFC, Home Front Finance, offers a complete package to the home loaner which includes education about loaning money and financial counselling.

In addition, loans of up to 100% for a maximum amount of R400,000 are granted, spread over 20 years. Applicants would have to prove that they have been employed in one place for a year, and that they earn up to R15,000.

The terms of a loan for higher income groups requires that the borrower raise between 5% to 30% of the property's purchase price.