FLISP: the key to buying your first home

With relatively low interest rates and quick home loan approvals, there's much to celebrate in the property market. The Finance Linked Individual Subsidy Programme (FLISP) or Help Me Buy A House programme is another factor driving homeownership. If you're a first-time buyer, this can help you achieve your dream much more easily. Kellaprince Properties provides a helpful guide to this important government subsidy.

What is FLISP?

Having a home is a right enshrined by our constitution. FLISP, initially introduced in 2005 and revised in 2012, is an initiative to make this a reality. If you're a first-time buyer with a lower income and meet certain criteria, you can apply for this government subsidy. With it, you can pay your deposit, bond registration or conveyancing fees, or pay the sum into an existing home loan and reduce your monthly instalments. This could also potentially help you afford a larger house.

Your FLISP subsidy can be used to buy an existing house or apartment, a serviced residential site i.e. a plot with access to basic services, or to build a house on a serviced residential site. If you purchased your first home in the past 12 months, you may also be eligible.

You can only apply for FLISP once in your lifetime and need not pay back the money you receive. As such, you should definitely take advantage of this opportunity if you qualify. 

How much does FLISP provide?

You will qualify for a FLISP subsidy on a sliding scale based on your household's gross monthly income. This can range from R27,960,00 to R121,626,00, with the highest subsidy available to the lowest earners. You can find several FLISP calculators online that can help you work out how much you can expect to receive.

Who qualifies for a FLISP subsidy?

While there isn't a catch to using FLISP, you will still need to meet the following requirements to qualify:

• First-time buyer: You should never have owned property before (even if in a previous marriage). You also can't have benefited from a similar government housing subsidy before.

• Income: Your combined household income must be between R3,501 and R22,000 per month.

• Nationality: You must be a South African citizen or have a permanent residency permit.

• Age: You must be 18 years and older and competent to sign a legal contract.

• Status: You must be married, cohabiting, or single with financial dependants (such as children or biological parents). 

Previously, you needed an approved home loan to qualify. However, with effect from the 2022/23 financial year, this is no longer needed. In fact, the subsidy now extends to non-mortgage housing finance facilities such as the Government Employees Housing Scheme (GEHS), pension funds, community-based savings scheme, etc. This makes it easier to fast-track your climb on the property ladder if you don't qualify for a home loan.

How to apply for FLISP

When you're ready to apply for FLISP, here are the steps involved:

1. Find a home you can afford without FLISP. Then put in an offer to purchase.

2. Apply for finance with an accredited financial institution.

3. Apply for FLISP by submitting an application to your local National Housing Finance Corporation (NHFC). 

To apply for FLISP in Mpumalanga, visit the Mpumalanga Department of Human Settlements at Ext 2, 7 Government Boulevard, Riverside Park Building, Mbombela, 1201 or call 013 757 0792. Alternatively, you can do it through your financial institution, conveyancing attorney, or property developer. Now that they have access to the Housing Subsidy System (HSS), they can capture and monitor your application progress. 

4. Receive your subsidy if your application is approved. This will be paid into your attorney's trust account or your home loan account once your bond is registered.

Together with your application form, you will need to have these documents (where applicable):

• Certified identity documents for all occupants.
• Certified copies of dependants' birth certificates.
• Certified copy of marriage certificate/final order of divorce.
• Original recent payslip/affidavit confirming unemployment/ proof of social grant.
• Certified copy of the deed of sale/offer to purchase.
• Certified copy of the bond approval/bond quotation.
• Original/certified copy of the statement of transfer cost from your transferring attorney.
• A building contracted and approved building plan.

Once you've submitted your application, the process can take seven days. The NHFC is required to notify you of the result within 21 days at the most.

Buy your first home with FLISP

Homeownership can seem like a challenge but FLISP is a great opportunity to achieve your real estate goal. With many affordable properties for sale, Kellaprince Properties can help you find a FLISP-friendly home that is within your budget. Plus, our team can offer advice to help you navigate the FLISP process. Get in touch today!