Mangere couple John and Leutu Figota are on the way to becoming homeowners, thanks to a home equity plan sponsored by the New Zealand Housing Foundation.
Wednesday, March 9th 2005, 6:16AM
by The Landlord
The foundation, created by a $1 million-plus investment by the Tindall Foundation, bought a run-down bach on a corner section in Mangere East and built two four-bedroom houses on the site for $250,000 each, including the land.
The Figota and Davis families moved into their houses on Thursday and will pay rent at undisclosed exact rates, but between $325 and $425 a week, until they can afford to buy the houses.
Foundation director Brian Donnelly estimates that when they buy, each house will be worth "a whole lot more" than $250,000. But the foundation will sell them at the cost price plus only 25 per cent of the subsequent rise in value up to the date of sale.
The rest of the increased value will be gifted to the families as a "deposit".
"For example, if the property increased by $40,000 between the time they occupy it and the time they buy, the family would receive $30,000 of that value as their equity deposit," Donnelly says.
Families must have a combined household income of at least $55,000 a year to get into the scheme - an amount that would once have been easily enough to save for a deposit on a house.
