Capitec and government team up to build low-cost housing

Capitec Bank, Cashbuild, and the National Housing Finance Corporation (NHFC) are launching Zakhelikhaya, a solution for investment in the affordable housing market.

Zakhelikhaya is a housing assistance programme initiated by Cashbuild and supported by Capitec Bank and the NHFC. It aims to address South Africa’s affordable housing backlog by providing accessible housing solutions.

South Africa is faced with a significant housing backlog. As of 2023, over 2.4 million households are registered on the National Housing Needs Register, with almost half of this backlog concentrated in Gauteng, the country’s economic hub. 

One of Zakhelikhaya’s key features is providing customisable house plan options, which allows customers to choose designs that suit their preferences and needs. 

Cashbuild costs these building plans to ensure affordability, and customers are also offered comprehensive support and financial assistance.

“Zakhelikhaya empowers our customers to realise their dreams of homeownership, contributes to the alleviation of the massive housing shortage in South Africa and fosters stability and prosperity within communities where we do business across South Africa,” Cashbuild Divisional Director Mimi Masala said.

Through this collaboration, money from the First Home Finance subsidy provided by the NHFC and a loan from Capitec Bank are consolidated to ensure a seamless approach to financing home construction projects.

“The National Department of Human Settlements introduced the Finance Linked Individual Subsidy Programme (FLISP) in 2005 to stimulate growth in the affordable housing market to qualifying beneficiaries,” said NHFC CEO Azola Mayekiso.

The FLISP was rebranded to the First Home Finance Programme in February 2023, and the Programme intends to give effect to the government’s objective to provide housing assistance to aspiring first-time homeowners. 

Households can now access the First Home Finance subsidy with both mortgage and non-mortgage products and buy or build their homes, even in rural areas, on the back of a Permission to Occupy (PTO) certificate issued by Traditional Councils.

Zakhelikhaya is targeted at eligible customers who fall within the NHFC’s First Home Finance subsidy. The subsidy is tailored for first-time homebuyers in the R3,501 to R22,000 per month income demographic.

Njabulo Ndlela is the first Cashbuild client approved for a First Home Finance subsidy through the Zakhelikhaya programme. 

He purchased a Cashbuild building plan and, based on the cost of construction, could raise the rest of the finance through Capitec’s home improvement loan.

“Capitec Bank has been a leader in this market for some time, and we have products to match, making it possible to partner with Cashbuild to service this gap market by bridging the financial shortfall that at times may arise for clients during the home construction process,” said divisional executive of emerging markets at Capitec, April Baloyi.

Capitec Bank has also shown its commitment to developing this market by entering a Memorandum of Understanding with NHFC.