An FNB building loan can only be used to build, and you must fund 10% of the total package price (land plus building contract) yourself, upfront. An individual needs a minimum income of R25,000 a month; on a joint application at least one applicant must earn R25,000 a month.
This page covers the FNB building loan requirements, the documents in FNB’s building loan application pack, how payments are released and where to apply. Details are on FNB’s building loan page.
Eligibility Requirements at a Glance
- Minimum income of R25,000 a month for an individual, or at least one applicant earning R25,000 a month on a joint application
- Pass FNB’s credit and affordability assessment
- Fund 10% of the total package price (land plus contract amount) upfront; FNB says this may increase depending on your credit profile
- The builder must be registered with the National Home Builders Registration Council (NHBRC)
- Building loans are not eligible for FNB Home Rewards
Income and Affordability Requirements
The loan is limited to six progress payments. Before FNB advances funds, any shortfall between the loan and the builder’s tender must be paid from your own funds, into the registering attorney’s trust account.
During construction FNB’s customer guide says you pay interest only on the amounts paid out, plus an additional 1% premium rate while the building is in progress. Capital and interest become payable on completion, or if the build runs past 12 months. The guide is an older edition, so confirm the current structure with FNB.
The latest payslip is needed, though not where your salary has been paid into an FNB current account for the last three consecutive months in the same amount and you have banked with FNB for at least 12 months. Variable income needs the last six months’ payslips.
Credit and Financial Requirements
FNB’s pricing guide states that the granting of any facility is subject to meeting the qualifying criteria of that facility. The maximum loan term on FNB’s building loan form is 20 years.
Funds are released in progress payments, not for materials sitting on site. FNB says you usually get up to six progress payments free, and additional ones attract an inspection fee. A municipal-approved plan is needed before the first progress payment.
Documents and Verification Required
FNB’s building loan application pack lists the following. Some items depend on your situation, so check the form itself.
- Identity documents or passports of all relevant parties
- A building contract or offer to purchase, with a schedule of finishes
- The builder’s quotation or tender with a full cost breakdown
- The builder’s NHBRC registration certificate and a valid full NHBRC certificate
- Draft building plans in PDF; municipal approval is not required at application stage
- A waiver of the builder’s lien and the builder’s Contractor’s All Risk insurance
- Your latest three months’ bank statements if salaried, or six months’ if self-employed or on commission, unless you bank with FNB
- Your latest payslip, unless the FNB salary exception above applies
How to Apply and Improve Approval Readiness
You can start your application through FNB’s call-me-back request, at a branch or on 087 730 1144. The application form is the FNB building loan application pack, which you complete and email with your supporting documents. It covers Building Loan and Further Building Loan applications for individuals, joint applicants, close corporations, companies and trusts. The copy online is dated October 2018, so ask FNB whether a newer version applies.
- Check that your builder is registered with the NHBRC and enrolled the property before construction starts
- The builder must also complete the work within 12 months of registration
- Keep your 10% contribution and any shortfall funds ready
- Collect the builder’s quotation and plans before you apply
Frequently Asked Questions
How is a building loan paid out?
In progress payments, with a limit of six free progress payments, and funds are not released for materials stored on site.
Do I need NHBRC registration?
Your builder must be registered with the NHBRC, and FNB’s guide says the property must be enrolled with the NHBRC before construction.
Do I pay instalments during construction?
FNB’s customer guide says interest is payable during construction, plus an additional 1% premium rate, with capital and interest payable on completion or after 12 months.
What happens if the build costs more than expected?
Any shortfall between the loan and the builder’s tender must come from your own funds before advances. Confirm with FNB how it treats cost increases.
Where do I get the FNB building loan application form?
FNB publishes it as the building loan application pack PDF, which you email with your documents. The online copy is dated October 2018, so confirm the current version with FNB.
Requirements, rates and forms change, so confirm current terms with FNB home loans before you apply. See loan requirements and browse all finance and funding requirements.