Home loans criteria for Non Residents
Non Residents (General)
Definition: Normal place of residence outside South Africa
Non residents may purchase property in South Africa. However, if they require financial assistance through a loan or bond amount, they have to apply to the Reserve Bank, which considers application for these requests. The loan or bond amount for non-residents may not exceed 50% of the value of the property. The application to the Reserve Bank can be handled by any of the commercial banks through with the individual wishes to deal.
Proof must be provided that the funds physically came into South Africa, which can be done by the attorneys involved in the property transfer. The title deeds on the property will be endorsed as “Non-res”.
South African residents temporarily abroad
Definition: South African residents who temporarily reside abroad are allocated normal lending facilities and should not be considered non-residents. Exchange Control regulations do not apply
Loan Amount: 100%
Credit requirements: Confirmation of income / affordability: Clarify the source of funding to meet the loan repayments.
Copy of lease agreement if the property is to be rented out.
Companies / Close Corporations / Trusts
Definition: Also known as “Affected Persons”. Where loan applications are received in the name of a Company, Close Corporation or Trust and 75% or more of its capital, assets or earnings are directly or indirectly vested in, or controlled by or on behalf a person not residing in South Africa or benefits any person not residing in South Africa, these applications are to be submitted by the International Business Centre.
Documents that need to be submitted:
- MP79(a) form – Reserve Bank form
- Annual audited financial statements
- Pro-forma balance sheet
|Type of foreign national and definition||MAX LTV||Exchange control rulings||Credit requirements||New Loans / Registrations|
|Non-Resident: A person (natural or legal entity) whose normal place of residence, domicile and registration is outside the common monetory area (citizens of countries outside the common monetory area). Normally persons on holiday in S.A.||50%|| * Exemption from Exchange Control Regulation 3(1)(f) applies.|
* Up to 50% of the purchase price of a local property may be granted to a non resident subject to the difference of the purchase price together with legal/transfer/admin costs being introduced from abroad.
Where funds are introduced from abroad to invest in SA and proof of funds introduced is held, Home Loans will consider finance for the amount introduced.
|Confirmation of income/affordability via either or a combination of:|
* Report from overseas bank
* Employer’s letter
* 3 Months bank statements
* Statement of assets and liabilities
* Debit Order from local bank account to facilitate loan repayment , to be funded from abroad or from rental in which case a copy of rental agreement required.
The overall proposal including loan amount, will dictate what information is required.
|Ensure confirmation of introduction of 50% of purchase price and approval of Exchange Control Regulation 3(1)(f) obtained.
AccessBond is not permissible
(CONDITION NO. 387)
|Contract worker: Natural persons defined as citizens outside the common monetory area who have taken up temporary residence in S.A. to work in terms of a valid work permit. Employment only with employer details stipulated in the work permit.||100%|| * On arrival in South Africa, Foreign Nationals should sign a declaration regarding their foreign assets – Section B.8.(E) of Exchange Control rulings.|
* Exemption from Exchange Control regulations is not a requirement
May be granted banking facilities normally accorded to SA residents.
| * Consider HL’s up to 100% LTV.|
* Confirmation of income / affordability – Work permit / Employment contract.
* Consider area / proposed length of stay
Term of sanction to highlight that on permanent departure from South Africa the facility granted to them must be brought in line with facilities accorded non residents namely LTV 50%
|Ensure copy of Section B.8.(E) or confirmation from authorised dealer that it is signed and held prior to registration
CONDITION NO. 388
|Refugee: Natural persons defined as citizens outside the common monetory area who have been formally granted asylum. Can remain in S.A. permanently and may seek employment||50%||Same as for contract worker||Same as for contract worker||Same as for contract worker
Ensure copy of Section B.8.(E) or confirmation from authorised dealer that it is signed and held prior to registration
(CONDITION NO. 388)
|Immigrants: Natural persons intending to reside permanently in S.A. and have applied for or received permanent residence status.||Section C.2.(F) of Exchange Control rulings must be complied with.|| * Confirmation of income / affordability|
* Full General Report from Overseas Bank
* 3 Months bank statements from overseas Bank
|Ensure confirmation held that Section C.2. (F) is complied with. (When it is the person’s intention to reside permanently in S.A., a declaration that foreign assets will not be placed at the disposal of a person normally residing in SA has to be signed)|
|Foreign embassies and consulates: Persons from foreign countries based in embassies and consulates in S.A. who conduct official embassy / consular bank accounts.|
Diplomat: Official overseas representative of Embassy / High Commissions.
Consulate: This includes foreign diplomatic and trade representatives as well as members of their staff. (Does not extend to S.A. nationals employed
|??||All local borrowing facilities must be granted subject to Exchange Control approval from the SA Reserve Bank||As per non residents||Exchange Control approval is to be given by the SA Reserve Bank directly.
(CONDITION NO. 136)
|Joint application: If one person owns more that 75% of the property||50%||Exemption from Exchange Control Regulation applies if the non-resident is to own 75% or more of the property. Normally applies to Companies / Close Corporations and Trusts as individuals only own 50% of a property if in joint names.||Regulation 3(1)(f) applies where 75% or more of the property is owned by a non-resident
(CONDITION NO. 387)