PENSIONS BACKED HOME LOANS
The Fund grants guarantees in terms of the Pension Fund Act 1956. In terms of the Act the sole purpose of such guarantees/loans is for housing purposes. The Fund gives a guarantee to a Financial institution which then grants a loan to the member. The granting of these loans is however subject to the provisions of the National Credit Act.
Frequently Asked Questions:
In what instances may I utilise this facility?
- To purchase a residence/land or to erect a building thereon for occupation by a member/dependants.
- To make additions/alterations to maintain/repair a property which belong to the member/spouse and which is occupied by the member/dependants.
How will the guarantee amount be calculated?
The guarantee may not be more than 33.33% or the lessor of the lowest of the amount of the lowest benefit which a member would receive on termination of his membership net of income tax. This includes the death benefit.
Why is the loan amount sometimes lower than the guarantee amount, or do I not qualify for the loan?
- The combined instalment of your Bond and Loan exceeds 25% of your salary.
- The instalments on the loan is not affordable.
- You are under administration/bad credit record or have judgements against your name.
May I use the loan for anything other than for housing purposes?
No, the Pension Fund Act provisions clearly states that it may only be utilised for housing purposes.
Can I apply for a loan to do maintenance alterations to a property that belongs to another person?
No, the Pension Fund Act clearly states that the property must be owned by the member or his/her spouse.
Where do I apply for the loan?
Applications are made at the Fund office, Mondays to Thursdays from 7.30 to 15.15 and Fridays 7.30 to 14.45.
How long does the process take?
The process can take up to 5 weeks.
What documents are required?
- Members Id or certified copy thereof.
- Spouses Id or certified copy thereof.
- Marriage certificate or certified copy thereof/ Customary Marriage –Affidavit by both parties
- Spouse consent letter signed by two witnesses plus copies of the ID’s of the two witnesses
- Proof of ownership of the property.( Rates and taxes account or Letter from the Chief if the property is in a rural area).
- If you purchase a new property: Certified copy of the Offer to purchase as well as a letter from the attorneys attending to the transfer of the property
- Proof of residential address.
- 3 months original Bank statements (last three months).
- 3 months original Payslips (last three months).
- Quotation for renovations/maintenance
- Affidavit that loan will only be utilised for housing purposes (Provided by the Fund).