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
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.”