S. Africa's Poor Will Get Money for New Homes

THE South African government is putting itself to the test as it starts to implement a much-trumpeted election promise to build 1 million homes before 1999.

The new initiative joins leading banks with the African National Congress in trying to turn tens of thousands of poor blacks into first-time homeowners.

Today through Sunday, 6 million copies of a tabloid Home Truths will be circulated in the press. The 32-page insert will detail who qualifies for a loan or subsidy based on income. When the housing scheme officially kicks off Monday, masses of aspiring homeowners are expected to line up at banks and housing boards around the country to stake their claims.

With 40 percent of black South Africans living under the poverty line, the need for proper housing has been given top priority by the government. At least 8 million South Africans live in dilapidated temporary dwellings, and only 1 in 4 blacks has electricity.

''Housing is absolutely paramount in normalizing South African society, which has forced people to live on the edge for their entire lives,'' says Minister of Housing Sanki Nkondo.

During almost four decades of white apartheid rule, blacks were not allowed to purchase homes. The new housing plan will give even the poorest access to home loans and government subsidies.

But there's a catch. Under the program, communities and individuals will have to prove they're ''worthy'' of the aid -- or are not likely to default.

''There can be no more write-offs,'' says Mr. Nkondo, referring to the present system where banks absorb unpaid loans.

''This is going to be the real test of the government's ability to deliver,'' says Joppie van Honschooten, a leading banker who helped formulate the plan.

The greatest battle government had was convincing bankers that it was commercially viable to finance those earning a minimum of $400 a month. Already some 32,000 houses, built by private developers prior to last April's all-race elections, have been illegally occupied by squatters.

''In the past ... anybody trying to evict illegal tenants would have been necklaced [killed by burning tire],'' says Stephen Laufer, a spokesman for the housing ministry. ''We have to now guarantee the banks that the rule of law will be enforced and that they will be reimbursed for losses.''

Business has generally applauded the policy as a way of opening untapped markets. ''The spinoff effect of new settlements is tremendous,'' says economist Mike Brown. ''Houses are furnished and kitchenware is bought. Neighborhoods are created with shopping centers, and other indirect business and job opportunities develop from there.

''Even if the government doesn't ... reach its target of 1 million homes by 1999, if it has come at least a third of the way and structures are in place, it will be good enough,'' adds Brown.

Many builders are skeptical. ''It can't be done,'' says Denny Ovadia, a developer. ''There's theft. You build a roof one day, tomorrow you have no roof, and violence is still a problem.''

But the banks still view it as a commercial venture. ''We wouldn't be doing it if we didn't think it would serve us in the long term,'' says Mr. van Honschooten. ''Unless we can build stable communities with homes and jobs, we cannot talk about transforming the country.''