Home loans for government employees in South Africa

Article summary

  • TheGovernment Employees Housing Scheme (GEHS) enables employees of the SouthAfrican Government to own their own houses at a much more affordable rate.
  • Governmentemployees enrolled with the GEHS may access such a home loan throughlenders who similarly participate in the scheme.
  • Despitethe SA Government being considered a reliable employer, a qualified bondoriginator is still advised to take you through the home loan applicationprocess.

Nothing quite beats owning a home: your own special space in which to express yourself and create memories with family and friends. And, if you’re an employee of the South African Government, such a dream could be that much easier to achieve.

The Government Employees Housing Scheme (GEHS) is an employee benefit scheme that offers housing access support services, including bond-based housing loans, to government employees.

A housing subsidy programme caters mainly for households with a monthly income of less than R3 500, and households with income between R3 500 and R15 000 qualify for partial assistance.

Even families bringing in R15 000 a month may remain excluded from accessing home loans, despite their regular income, if they cannot prove to lenders that they can affordably meet the monthly bond repayments on their earmarked property.

However, in 2016, South Africa’s government employees pension fund invested R10.5 billion to provide cheaper bonds to qualifying applicants, enabling many government employees to own their own houses at a much more affordable rate.

Mortgage-based housing loans

Under the Government Employees Housing Scheme, a mortgage-based housing loan is a loan accessed from a registered financial institution for the purposes of buying, building and/or renovating your house with your house being held as security for the loan. Generally, such loans have the following features:

  • Bondregistration costs
  • Estateagent’s commission priced-in (ordinarily paid by the seller of the house)
  • Relatedinsurances
  • Averagerepayment term of 20 years and more
  • Loansubject to affordability, value of the house and lenders’ terms
  • Valuationand inspection of the house
  • Governmentemployees may access this type of housing loan through lenders whoparticipate in the GEHS. All employees are required to first enrollwith the GEHS to access any and all services offered by scheme.

Employment security and loan affordability

First-time buyers who also happen to be government employees would be wise to avail themselves of this special employee perk. Keep in mind, of course, that the lending institutions (banks and private lenders) may have different criteria for assessing you and to decide if you as a client deserve to be awarded with a loan. We recommend advising applicants to use a qualified Home Loan consultant to assist them with the process of securing their loans.

The truth is when it comes to loans, if you are a government employee, the chances of you getting a bond is pretty good. This is due to the fact that the Government is considered a very reliable employer and the salaries are also considered high enough – meaning there will be sufficient money to repay your loan.

To make the home-buying process that much easier Get pre-qualified, or apply for a home loan with O-YES today.