FLISP – how can first-time homebuyers qualify?

FLISP – how can first-time homebuyers qualify?

MAIN IMAGE: Meyer de Waal, director of MDW Inc. Attorneys

Property experts are forecasting that the lower end of the property market will continue to see brisk activity this year. The FLISP government subsidy can go a long way to helping first-time homebuyers in the lower income bracket realise their dream of owning a home of their own.

The Finance Linked Individual Subsidy Programme (FLISP) was introduced in 2012 by government to assist the growing group of first-time homebuyers in the so-called ‘gap’ market – meaning those who are ‘too rich’ to qualify for a RDP home but ‘too poor’ to easily buy a home of their own without some form of financial help.

The scope of the FLISP programme was enlarged last year to make it accessible to more first-time homebuyers. People who qualify can now apply for a FLISP subsidy from R27 960 up to R121 626 that can be used to pay the home loan deposit or to decrease the size of the home loan.

“If one follows correct steps to apply, the subsidy can go a long way to assisting a first-time buyer in what could be a very financially stressful time when buying a home, says Meyer de Waal, director of MDW Inc. Attorneys, one of the founding members of the Attorney Realtor Hub and FLISP assistance services.

This subsidy is open to those who earn between R3 501 and R22 000 per month (combined gross household income) and who meet the qualifying criteria. The home loan of the buyer must first be approved, and the buyer must be a South African citizen and be married, co-habiting or single with a dependent. The new buyer must never have benefitted from a similar subsidy before; e.g. an RDP house.

Many first-time homebuyers will in most cases first find a property and sign all the legal documents to secure the property, and then start the process to find out if they qualify for a home loan and a FLISP subsidy.

“Start at the “back” – which actually ought to be the first step for any home buyer,” explains de Waal. “Most home buyers first find a property and then the “worry” starts for how much they will qualify. We first look at the financial side – and only then to find a property that matches your budget”, says De Waal.

“If the applicant is a first-time buyer, the first thing to do is find out if he or she qualifies for this subsidy, then follow the rest of the application process steps listed below,” says Verna Pugin of CM2 Group who heads the FLISP service as a private service to home buyers.

“This might seem like a complicated process and may scare away many first-time home buyers, but we have simplified the process and will guide them every step of the way.”

This is how it works:

  • Step 1: Establish if the person would qualify – i.e. FLISP subsidy amount and home loan amount respectively – this is to establish their buying power.
  • Step 2: Without an approved home loan, one does not have access to a FLISP subsidy, so this next step requires them to check their credit score to check if they are fit for a home loan.
  • Step 3: They then submit their income and expenses to check what their actual affordability is and whether they’d be able to repay the monthly home loan instalments.
  • Step 4: Once they have the pre-approval for a bond (home loan), they find a property that they can afford and sign an offer to purchase, using their pre-approval certificate.
  • Step 5: They then email the Offer to Purchase to the FLISP office for submission to the banks for a final bond approval. The FLISP support team will apply for the FLISP subsidy as soon as the home loan is finally approved by a bank.
  • Step 6: The government will issue a guarantee to the transferring attorneys once the FLISP subsidy is approved.
  • Step 7: The FLISP office will communicate with the transferring and bond registration attorneys to pay over the subsidy just before the property is transferred at the deeds office.

As a first-time homebuyer who qualifies for FLISP, all legal fees attached to the transaction can be paid from this subsidy.

An online home loan FLISP affordability calculator is available on the FLISP website, www.FLISP.co.za.  Buyers should also check their financial health, and what bond they qualify for through https://FLISP.mybondfitness.co.za

Showing 18 comments
  • Thopile
    Reply

    i wanted to apply for first time home owners subsidy but I get all the unnecessary emails without a feedback in my application do I qualify or not that all I want to know all these link I get are not what am looking for

    Thopile Happiness Dladla
    angie.dladla@fnb.co.za

  • Faieka Pandey
    Reply

    what about people that earn more than R22000 a month & after rent, water, electricity, car repayment, medical aid, gap cover, insurance, fuel, school fees are paid, they have bare minimum left for the month? I cannot afford to buy unless I cut out my essential expenses, like insurance & medical aid. I dont live above my means. Don’t entertain. Only essentials. Thank you
    Faieka

    • Meyer de Waal
      Reply

      Faieka – the R22 000 income is “ceiling” that the Government set – and is your total combined gross household income

  • Fabiola R Samuels
    Reply

    I have applied- approved- got my first home owners certificate – the company iam buying from had problems with the property and was placed on hold ….now the whole process needs to be redone- iam worried because i did open a credit card in the meantime

  • Slie
    Reply

    This is not assistant us who are aiming to but houses for cash since we cannot afford bond based in credit record

    • Meyer de Waal
      Reply

      No 1 You need to check your credit score first – that it is still in good ‘shape” and No 2 – make sure that your current debt repayments are not too high to prevent you from qualifying for a home loan – you can do your free credit check – go to https://flisp.mybondfitness.co.za

  • Denita Petersen
    Reply

    I earn 5600 per month do I qualify

    • Meyer de Waal
      Reply

      If you earn less than R3 500 pm – then you can put your name on a waiting list for a “free house”. My experience is that it tales years to get such a house.
      if you earn between R3 501 – R22 000 you need to apply for a home loan first and if you then if you get a home loan approved can apply for a FLISP subsidy

  • Denita Petersen
    Reply

    I’ve been on waiting list since 1998 I don’t qualify cause I earn more thann3000 for RDP house they said at Civic Centre

  • Pauline Mnguni
    Reply

    Kindly send application form I want to apply for a house

    • Helene Meissenheimer
      Reply

      Hi Pauline, You will find an application form and the steps to follow on the FLISP website https://www.flisp.co.za/. Best of luck!

    • Meyer de Waal
      Reply

      If you earn less than R3 500 pm – then you can put your name on a waiting list for a “free house”. My experience is that it tales years to get such a house.
      if you earn between R3 501 – R22 000 you need to apply for a home loan first and if you then if you get a home loan approved can apply for a FLISP subsidy

  • Lisa
    Reply

    I did my application, but when they check on credit bureau my score was lower of which it was a mistake that was caused by credit bureau. But on my form with the person was assisting me he wrote “bond ready” of which I don’t know what does “bond ready” means. Could you please explain the meaning please..

    • Meyer de Waal
      Reply

      Lisa – to be “bond ready” it means that you must have a credit score that is acceptable to a bank [i would suggest that you investigate your credit core and repair the problems] then you also need to have sufficient cash in your budget to pay for a home loan instalment – usually the financial institutions – banks are looking at 30 % of your income as a guid to pay back the home loan. Once the home loan is approved – then you can apply for FLISP

  • Leonardo
    Reply

    Good day I am happy with the flisp subsidy I got last year. I moved in this year. I want to know when can I sell my house whether its paid of or not so I can buy a bigger house. I there a clause on the flisp subsidy.

  • Francina
    Reply

    Good day

    I have since dropped my flisp application at department of housing November 2018 and i have never had any reply. every time i call for help, i am told i didn’t apply. I have started paying for my bond on the 25th of February 2019 and now i am afraid i wont be able to qualify anymore because in gauteng you only get 3 moths from date of registration. i feel so helpless. I have to work overtime every weekend to be able to pay R6224.00 of my instalment. and i only earn R13500.00 before deductions and overtime. Should i apply somewhere maybe i will qualify?

  • d naicker
    Reply

    iv send all docs 3 weeks ago still no feedback.tryed calling no one picks up.

    • Meyer de Waal
      Reply

      Where did you apply – Province and office? You need to be able to show proof of delivery of the application as some provinces have a cut-off date for applications Meyer de Waal

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