UCTRF Pension-Backed Housing Loan Agreement

The UCTRF offers a pension-backed housing loan through FNB to qualifying members.

What is the FNB pension-backed housing loan?

FNB lends you an amount which will depend on your Accumulated Retirement Savings, and what you can afford.

The loan may only be used to:

• purchase a home for occupation by yourself and/or your dependant(s);
• purchase land and erect a dwelling for occupation by yourself and/or your dependant(s);
• make additions and alterations or repair a dwelling which is jointly owned by you and your spouse, and which is occupied by you and/or your dependant(s);
• finance alternative energy solutions for a home, which is owned by you and your spouse, and which is occupied by you and/or your dependant(s).

The repayments are deducted, by your Employer, from your salary.

The UCTRF provides FNB with a guarantee that if you default, the outstanding balance of your loan will be deducted from your Accumulated Retirement Savings and used to settle the loan. 

All applications must be done via the UCTRF Office for pre-approval and not at the bank! This does not guarantee that the loan will be approved by the bank. All FNB Smart Housing Plan Loans will be scored in terms of the National Credit Act (NCA) & FNB’s Credit Policy.

Please read the FNB Brochure below for additional information.

How much can I borrow?

The amount you may borrow would be subject to:

• your ability to make monthly payments (affordability);
• the maximum amount of the loan not exceeding the lesser of:
  • 70% of your Vested Share and 60% of your Non-Vested Share, after tax has been deducted (please refer to your latest benefit statement for this information), or
  • 90% of the market value of the property concerned;
• a minimum loan amount of R15 000;
• your monthly repayments in respect of your housing commitments through UCT not exceeding 30% of your gross income (total pay from your Employer before taxes or other deductions) including bond repayments if applicable, or 50% of your nett income (amount of your take-home pay remaining after any deductions­) at the date of application, whichever is less; and
• you having no garnishee orders.

What Interest Rate and Fees will I pay on an FNB Pension-Back Housing Loan?

The interest rate on the loan is prime minus 1.25%. 

In addition, there is an initiation fee of R300 and a monthly service fee R23.00 per month (VAT included).

You may also elect Optional Risk Benefit Cover at a cost of R2.49 per R1 000 per month. 

For more detail on the above, click here.

Application Process

1. Inform the UCTRF Office of your interest in applying for a loan (see Contact us).
2. Complete the application forms: UCTRF application form and the summary of income and expenses sheet.
3. Request a meeting for pre-approval with the UCTRF Office and bring your completed forms and supporting documentation to the meeting or email in advance for a virtual meeting via MS Teams.
4. If approved by the UCTRF, you will need to complete the FNB loan application form along with all the required supporting documentation.
5. Have the forms signed by your spouse if your spouse’s consent is required (i.e. you are married in Community of Property, Muslim Rights, Tribal Rights and Traditional Rights).
6. The completed application form and supporting documentation must be returned to the UCTRF Office. The UCTRF Office will submit all documentation to FNB to be processed.
7. The expected turn-around time for an outcome is 5 – 7 business days. (This excludes Saturdays, Sundays and Public Holidays.)
8. If the FNB Pension Backed Housing loan is declined, you will be notified by FNB either via SMS or an emailed letter sent to the contact details provided on the application form.
9. If the FNB Pension Backed Housing loan is approved: 

• i) An FNB consultant will contact you to discuss the Smart Housing Plan Quotation and Credit Agreement, which will be emailed to you for signature. If you are married (i.e. married in Community of Property, Muslim Rights, Tribal Rights and Traditional Rights) we will require spousal signature on the Credit Agreement.
• ii) FNB will request the UCT HR sign-off on application once signed by you and spouse (if applicable).
• iii) Once returned to FNB, surety will be requested from the UCTRF.
• iv) Once the surety has been approved and received by FNB, the Pension Backed Housing Loan will be paid to you.
• v) FNB will notify payroll office and the UCTRF Office of the loan details and of the instalment amount as soon as FNB processes the payment.

Supporting documents required when applying for a Pension-backed Housing Loan

The following supporting documentation is required with all applications:

Applicant:

1. Certified copy of green bar-coded I.D.  or Smart I.D. Card (both front and back of the card to be certified)
2. Latest clear 3 months’ pay slips
3. Latest clear 3 months bank statement, reflecting latest 3 salary deposits (not required if your salary is paid through FNB)
4. A valid proof of address, always to be in applicant’s name no older than 2 months (Proof of address from within the FirstRand Group and Wesbank  or doctor’s and hospital accounts will not be accepted as proof of address.)
5. Attorney’s Invoice or Building quote always to be in line with loan amount or Offer to purchase and bond approval

Co-applicant (Only if the client married in Community of Property – this includes Traditional, Muslim and Tribal Rights)

1. Certified copy of green bar-coded I.D.  or Smart I.D. Card (both front and back of the card to be certified)
2. Marriage certificate
3. Latest clear 3 months’ pay slips
4. Latest clear 3 months bank statement, reflecting latest 3 salary deposits (not required if FNB banked)

Please note that FNB require the applicant and (if applicable) the applicant’s spouse to both be in possession of a green bar-coded I.D.  or Smart I.D. Card.

FNB require living/cash expenses amount on application, for applicant and co-applicant, (will be for e.g. food, entertainment, school fees, etc.). 

If the co-applicant is not working,  then they need to indicate “unemployed” on the application under section 2 of the FNB application form.

In terms of the Pension Funds Act the applicant or his or her spouse need to be the owner of the property or in the process of purchasing a property. Please note it is the applicant’s responsibility to ensure he or she has sufficient funds to stand guarantee for the Pension Backed Housing before applying.  Pension Backed Housing Loans are subject to an affordability assessment in terms of the National Credit Act and FNB's Credit Policy.

What happens if I leave employment or if I am no longer a member of the UCTRF and have an outstanding balance on my loan?

If you are retrenched, dismissed or resign or retire, and are paid a withdrawal or Retirement Benefit, the outstanding balance of your loan will be deducted from your Accumulated Retirement Savings and used to settle the loan.  You would be paid out the balance of your credit in the UCTRF, after tax has been deducted.

However, if you leave your Employer’s service and elect to become a Deferred Pensioner or Phased Retiree, you have the option to either:

1. settle the outstanding balance on your loan from your Accumulated Retirement Savings; or
2. continue to repay the loan to FNB at the same interest rate. In this case, as the repayments can no longer be debited from your salary by your Employer, you will need complete a debit order form allowing FNB to debit the repayments directly from your bank account. In the event that you default on repayments for 3 months, FNB will contact the UCTRF and advise them to deduct the full amount of the outstanding loan from your Accumulated Retirement Savings to settle the loan.  HR will provide you with the debit order form to complete and the form should be returned to HR for FNB to implement the debit order.

If your savings are used to settle the loan, the money taken from your Accumulated Retirement Savings will be treated as a withdrawal or retirement, as the case may be, and you will have to pay any tax due on this amount. The amount deducted to settle the outstanding housing loan will be deducted proportionately from the Vested Share and the Non-Vested Share of your benefit.