With the housing backlog at over two million and the number of people without access to housing finance increasing due to lack of affordability, the Housing Investment Partners (HiP) Home Finance could not have come at a better time.
Housing Investment Partners (Pty) Ltd (HiP) was founded by Old Mutual, Pan-African Capital Holdings and the National Housing Finance Corporation (NHFC) to address the financial gap market challenges. It provides an alternative solution in South African housing, tailored to the needs of first time, lower-to-middle income home buyers.
The distinguishing factor of HiP Home Finance is its qualifying criteria for affordability, which takes into account not merely the present income of an applicant, but also the applicant’s future earnings potential. It also enables potential home buyers to acquire larger loans than they would have qualified for under a conventional product, at lower repayments for approximately the first 10 years earlier, than might be the case through conventional lending. The scheme provides access to housing finance for those who otherwise would not have qualified due to affordability.
The target market for HiP Home Finance is predominantly full-time, formally employed individuals with South African citizenship. Although applicants should earn between R3 500 and R18 000 per month, HiP will primarily target clients who fall within the Financial Services Charter (FSC) target market, earning between R3 000 and R9 000 and these should not be older than 40 years of age.
Through partnerships with Government, the private sector, developers and employers, HiP Home Finance improves social stability and promotes growth in the economy by creating wealth for lower-to middle-income earners through property ownership.
The partnership with employers helps promote HiP Home Finance at the client’s workplace as an employee benefit. This benefits employers by not only increasing employee satisfaction and retention figures but also by gaining reputational merit for their role in furthering housing delivery in South Africa.