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FLISP subsidy policy revised – no need for home loan to obtain government subsidy

MAIN IMAGE: Jackie Smith, Head of Product Management, ooba Group; Meyer de Waal, a conveyancing attorney of Cape Town; Mmamoloko Kubayi, National Minister of Human Settlements; Chris Fick of Attorney Realtor Hub

The National Minister of Human Settlements, Mmamoloko Kubayi, announced that the Finance Linked Individual Subsidy (FLISP) has been delinked and is no longer just a mortgage only option.

Furthermore, partnerships were established with external role-players such as financial institutions, conveyancing attorneys and property developers, granting them access to the Housing Subsidy System (HSS) which allows them to capture and monitor the progress of applications. The result is a drastically improved turnaround time for processing these applications.

The FLISP programme is a housing subsidy to assist qualifying first-time home buyers with purchasing a home. The subsidy is paid directly to the conveyancing attorney or financial institution and can be used as a deposit to buy a home, or to pay such into an existing home loan and reduce the monthly instalments.

Households with an income between R3 501 to R22 000 may qualify for the FLISP subsidy if they meet all the criteria, such being a first-time buyer with a financial dependent and a South African citizen. The current subsidies range between R121 626 to R27 960.00. This may also increase.

Estate agents are happy with the new changes to financing options in this market sector.

“The changes implemented by the Minister are welcomed by the affordable housing market: especially for qualifying customers. Ensuring that the subsidy is no longer dependent on a home loan is exactly what South Africans require to become first-time homeowners,” Jackie Smith, Head of Product Management for ooba Group said.

She hoped the Minister will consider some other barriers to entry such as first-time homebuyers who must have dependants if they want government assistance.  This is a barrier for qualifying graduates who are starting their homeownership journey. Another focus area must be to improve the overall turnaround times.

“Our association with the National Housing Finance Corporation, Funder of FLISP subsidies, has proven that with proper customer engagement and pre-vetting of applicants, the overall turnaround time from application to pay-out of the subsidy can be hugely improved. The National Housing Finance has partnered with ooba to offer the FLISP subsidy to their client base in the affordable housing sector and it has proven a huge success to relinquish control of process to an external service provider at no cost to the homebuyer.”

Since FLISP’s inception in 2005, the approval of the subsidy was always linked to “finance” in the format of an approved home loan from either one of the major financial institutions such as ABSA, Standard Bank, FNB, Nedbank or SAHL.

“Not anymore,” says Meyer de Waal, a conveyancing attorney of Cape Town whose mission it was over the past eight years to assist first time buyers to gain access to a home loan and assist with a FLISP subsidy application.

“The announcement by Minister Kubayi at virtual briefing to the National Council of Provinces (NCOP) is a welcome development,” says De Waal.

“Often in the past, we considered giving up as the barriers to entry for a first-time buyer were too difficult to overcome. We welcome Kubayi’s announcement and are glad that we persevered and today can provide a comprehensive FLISP first time buyer assistance that includes home loan and or non-mortgage linked finance application services,” he said.

According to De Waal, partnerships in the private sector were established over the past years, and these are now the foundation of a comprehensive service to first time buyers mortgage originators, attorneys, estate agents as well as such service to the Department of Human Settlements and the NHFC to provide comprehensive FLISP application submissions.


According to De Waal they reached out to other industry stakeholders in the legal fraternity and formed a partnership with them to promote FLISP applications through their extensive conveyancing attorney network.

Through the Gawie le Roux Institute of Law they also hosted FLISP information sessions and more combined workshops are planned. The Attorney Realtor Hub, through 13 branches on a national scale, are also assisting their buyers and sellers with this service.

“At the moment, only the Western Cape allows for the payment of conveyancing fees from the FLISP subsidy proceeds,” says Chris Fick of Attorney Realtor Hub. “Often a buyer does not have the funds available to pay for conveyancing fees and we expect that the new FLISP policy will be expanded on a national level to accommodate the payment of conveyancing fees as well.”

Similar FLISP information sessions and events facilitated through the Institute for Estate Agents (IEASA) were hosted and further events are planned.

To accommodate the onboarding of thousands home loan applications per month, cutting edge property and fintech technology were developed in a partnership with 4Me.Tech. This technology is now applied to aid buyers with non-mortgage linked financial applications and a FLISP subsidy.

FLISP calculator

As per the new National Housing Code, a FLISP pre-qualification guarantee can be issued to a first-time buyer by the implementation agencies appointed by the Government.

According to Jacques Theron of 4Me.Tech, their technology enables them to issue a first-time buyer with a FLISP Voucher before they start the home buying process. “After an applicant signs up on our online platform and answers a few qualifying questions, the technology does the rest and a FLISP Voucher is issued to provide an accurate estimate of the subsidy the home buyer can qualify for.”

The FLISP Voucher can then be validated through HSS integrations with the Department of Human Settlements or the systems of the NHFC as per a working relationship with these institutions.

Next step – how much?

A FLISP Voucher is the first step to take, and the first-time buyer can then establish how much finance can be obtained to buy a home in combination with the FLISP subsidy and the finance granted and available.

One stop shop

“Our online property finance pre-qualification estimator provides an outcome in real time and also provides a FLISP Subsidy Voucher that can be validated,” says Theron.

Not only is the first-time buyer assisted to compare finance through a home loan, but also to all the non-mortgage linked financial services that will be available as from 1 April.

A first-time buyer, with no or little experience to buy a property and shopping around for the most appropriate property finance, will be very confused if all the finance options are not presented on one easy to navigate platform. The first-time buyer can also be lured to take up non-mortgage finance that he or she may not be able to afford.

Once the finance is taken up and a home purchased, it may land the new homeowner in financial difficulties if the monthly repayments cannot be met. For that reason, an online platform with a quick credit score and affordability self-check for the buyer was developed. The outcome is available in real time.

Will I qualify?

A first-time buyer will still have to comply with the strict rules of the lending practices and guidelines as per the National Credit Act.

“Up to 50 % of home buyers are unsuccessful from the start due to a low or a bad credit score. If I look at the +/- 340 000 applications who were processed over the past 36 months, more than 185 000 aspiring buyers were unable to even be considered for a home loan, due to a low, thin, or bad credit score. If a finance application is declined, a first-time buyer will not be able to receive a FLISP subsidy.

“We can enable the first-time buyer with a low, thin, or bad credit score to receive assistance to improve his or her credit score and get back to apply for finance as soon as the credit score is strong and healthy,” says De Waal.

Rent to own, instalment sales

“We are elated that the rent to own concept and instalment sales were also added in the National Housing Code,” says De Waal.

The Rent2buy programme was developed in 2007 and is geared towards helping first-time buyers to get their foot in the door to own their own homes. Later instalment sales were also added to aid buyers to own their own properties.

Private partnerships were established with property development companies such as Sinai Property Developers and Communicare to aid first time buyers to own their own home, and more property development companies are expected to follow and make available their stock to these types of innovative property solutions.

“We already have access to non-banking finance available for buyers who struggle to convince a traditional bank to grant them a home loan,” says De Waal.

What changed?

As from 1 April you no longer need a finance approval from one of the major financial institutions, explains Anele Matakane of MDW INC property & home finance services.

Now, a buyer can qualify for a first-time buyer FLISP subsidy if they have financial assistance to buy a property in the form of:

  • the beneficiary’s pension/provident fund loan,
  • a co-operative or community-based savings scheme, i.e., stokvel,
  • the Government Employees Housing Scheme,
  • any other Employer-Assisted Housing Scheme,
  • an unsecured loan,
  • an Instalment Sale Agreement or Rent-to-own Agreement.

“Our mortgage origination license with one of the largest mortgage origination companies provides financial assistance to up to eight traditional home loan lenders,” says Matakane.

This also includes non-mortgage finance which is a unique offering to the industry.  All the property finance solutions are under one roof.

“For non-finance linked applications, we work with 4.Me.Tech to assist buyers with every type of finance solution available with the National Housing Code.”

Late applications

Unfortunately, many first-time buyers did not know about the opportunity to apply for a FLISP subsidy and never applied. However, this may now change with the new policy as retrospective applications may be considered as soon as the new guidelines are made available.

A comprehensive one-stop-online platform was developed and is available on

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