If you’re a South African citizen wanting to buy a house for the first time, the government can help you secure a home loan through a programme called the Finance Linked Individual Subsidy Programme (FLISP). How does this programme work and who is eligible to apply?
JustMoney reached out to Nathan Adriaanse, head of communications for the Western Cape Department of Human Settlements, to answer these questions.
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How does FLISP work?
The programme is designed to help clients to pay for their first residential property. This can be an existing home or a vacant plot where they plan to build their house. According to Adriaanse, the contractor building the house must be registered with the National Home Builders Registration Council.
“The subsidy is paid to your bank or financial institution and will reduce your monthly loan instalments, making it more affordable to purchase a home,” says the department’s spokesperson.
The funds can also be used as a deposit to cover any shortfall between the approved home loan amount and the purchase price. However, it cannot be used to pay costs such as transfer and bond registration fees.
Adriaanse says the amount of the subsidy depends on your income. It ranges between R27,960 and R121,626.
Who qualifies for the programme?
According to the Adriaanse, in order to qualify for the subsidy, you must
- Earn between R3,501 and R22,000.
- Be a South African citizen or have permanent residency in South Africa.
- Be over 18 years.
- Be married or cohabiting, or be single with financial dependants.
- In addition, you must not have received a government housing subsidy, or have owned fixed residential property before.
What is the application process?
Adriaanse says you must first apply for a home loan from your preferred financial institution before you apply for the programme.
“Once your home loan is approved, an FLISP application can be discussed with your bank, financial institution, the Department of Human Settlements, or your nearest municipality,” he says.
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What if your home loan application was not approved?
According to the department’s website, if the home loan application is declined by the bank, then you will not be able to get the subsidy.
To apply for FLISP, you must be in the process of purchasing a property. You can also apply if the property was registered in your name in the past 12 months.
What documents do you need to apply?
To apply for the programme the following documents must be presented:
- RSA bar-coded Identity Document (ID)
- Bar-coded Permanent Residence Permit (where applicable)
- Birth Certificates/RSA ID’s of all financial dependants (where applicable)
- Proof of Foster Children Guardianship (where applicable)
- Marriage Certificate (where applicable)
- Final order of divorce (where applicable)
- Spouse’s Death Certificate (where applicable)
- Proof of Income
- Home Loan Approval in Principle/Grant letter from an accredited Lender i.e. Absa, FNB, Nedbank, Standard Bank or SA Home Loans.
- Agreement of sale
- Building contract and approved building plan (where applicable)
- Statement of transfer costs from conveyancer indicating transfer and bond registration costs (where applicable).
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