Botswana Housing Corporation’s (BHC) sitting tenants who don't qualify for mortgage loans with commercial banks are expected to benefit from the just re-introduced Tenant Purchase Scheme. The scheme, which was re-introduced by the Ministry of Lands and Housing in conjunction with the BHC was launched on Monday and will immediately be put into operation, the Minister of Lands and Housing Prince Maele revealed. “We are ready to start today,” Maele said. According to the Minister, the scheme will afford sitting tenants only an opportunity to purchase a house being rented out to them. He, however, explained that the scheme is not new in the market as it was previously administered by the BHC between 1986 and 2004. Maele said that the scheme was stopped because of among others; a huge arrears of P44 million; which are now under control at a magnitude of P1.5 million, processes records which by then did not facilitate good management of the scheme and lastly because the scheme was not targeted.
According to Maele, the scheme will now target low income tenants who are limited in accessing financing facilities in the open market. He said the scheme would offer another vehicle through which government would facilitate and promote affordable home ownership, thus enabling Batswana aged 65 years and below and currently leasing BHC houses to purchase the house on a relaxed installment terms over a maximum repayment period of 25 years, at prime plus 3 percent. “This time around, potential purchasers would be subjected to a vetting process to establish their financial suitability for the scheme,” he said. All applications will, according to Maele, be routed past local banks to determine whether or not they qualify for mortgage loans with such institutions and if so, such applicants will not benefit from the scheme. The minister explained that BHC will oversee implementation of the scheme and will arrange for a compulsory credit life insurance to cover the loan of the purchaser.
“This is essentially meant to ensure that when the purchaser passes on or becomes permanently disabled, the beneficiaries would not lose the house. Credit life insurance will be capitalised into the loan to ensure that the installment is manageable,” said Maele. Maele also explained that the BHC may also allow purchasers to provide their own life covers if they so wish and property insurance shall be provided for by the corporation as subject properties will still be vested with them. BHC currently has 6000 units that are likely to be sold using the schemes, but this - according to Maele - will be determined by a vetting process. The corporation is expected to conduct a nationwide campaign to sensitise people about the reintroduction of the scheme and how it will benefit them.