What is Flisp and how do you qual­ify?

If you don’t earn a lot and don’t have much in the way of as­sets, you could ben­e­fit from a state pro­gramme de­signed to help you get a foot on the prop­erty lad­der, writes An­gelique Ruz­icka

CityPress - - Business -

As a first-time home buyer in South Africa, it’s not easy get­ting your foot onto the prop­erty lad­der be­cause prop­erty, es­pe­cially houses and flats in de­sir­able ar­eas, is ex­pen­sive. It’s also dif­fi­cult to get enough credit as you need to have a good credit score – and a de­posit if your credit score is less than per­fect.

How­ever, you could qual­ity for a gov­ern­ment-backed pro­gramme that helps boost your chances of buy­ing a home. If you are a South African cit­i­zen with an av­er­age house­hold in­come of be­tween R3 501 and R15 000 a month, you could qual­ify for the Fi­nance Linked In­di­vid­ual Sub­sidy Pro­gramme (Flisp).

Sim­phiwe Madik­izela, head of re­tail sales and spe­cial projects at FNB Hous­ing Fi­nance, ex­plains: “The Flisp can be used to re­duce the prin­ci­pal loan amount to make the home loan re­pay­ment in­stal­ments af­ford­able. Prior to mak­ing the ap­pli­ca­tion, the ap­pli­cant must ob­tain ap­proval for a home loan from their bank.”

HOW DO YOU QUAL­IFY?

Un­der Flisp rules, first-time home buy­ers can qual­ify for once-off sub­si­dies of be­tween R20 000 and

R87 000, de­pend­ing on what you earn and pro­vided you haven’t ben­e­fited from a gov­ern­ment sub­sidy be­fore. You also need to have an ap­proved home loan from a bank or you will not qual­ify for Flisp.

Ac­cord­ing to the West­ern Cape gov­ern­ment web­site, one must be “com­pe­tent to con­tract” – mean­ing that you must be older than 18, legally mar­ried or legally di­vorced and of sound mind. You also qual­ify if you are co­hab­it­ing with some­one. Sin­gle peo­ple with fi­nan­cial de­pen­dents can also ap­ply.

You must be in the process of pur­chas­ing a prop­erty. If you have al­ready bought a home, it should not have been reg­is­tered in your name for more than 12 months as ap­pli­ca­tions af­ter this win­dow pe­riod are not be­ing con­sid­ered.

There is a catch, though – you can’t sell the prop­erty im­me­di­ately.

“If the home owner sells the prop­erty within eight years of ben­e­fit­ing from Flisp, there is a con­di­tion that the por­tion of the sub­sidy is to be re­funded by the seller,” warns Madik­izela.

“Fur­ther­more, the seller needs to give gov­ern­ment first pref­er­ence to pur­chase the prop­erty or get ap­proval from the depart­ment of hu­man set­tle­ments to sell the house.”

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