Home loan originator MortgageSA has set its sights on the lower end of the housing market, and has partnered KwaZulu-Natal micro lender Ithala Development Finance Corporation in making inroads into the low-cost housing market.

'MortgageSA is positioning itself for a new lending landscape, and the Ithala partnership is a key aspect of this strategy,' says MD Saul Geffen.

Mortgage origination puts an independent agent between homeloan consumers and financiers. This business is gaining popularity in SA, and claims more than 40% of the home loan market.

Geffen says the partnership with Ithala is a strategic move. 'It has ramifications for the entire housing market in KwaZulu-Natal as sluggish home loan approvals at the lower income end of the market have a knock-on effect into the middle income market and beyond.'

He says the partnership places the company at the leading edge of developments in the community lending market.

'Familiarity with these challenges is increasingly important in view of imminent changes to the housing policy environment,' says Geffen.

'We are eager to explore mechanisms that will broaden the home ownership base and make this dream a reality for all sections of our population.'

The partnership comes as government prepares to step up its bid to involve private sector lenders in the low cost housing market.

Two pieces of legislation are in the pipeline the Home Loan and Mortgage Disclosure Bill and the Community Reinvestment Bill, which could prescribe some specific institutional lending to the low cost housing market.