The Finance Linked Individual Subsidy Programme (FLISP) was developed by the Department of Human Settlements to enable sustainable and affordable first time homeownership opportunities to South African citizens and legal permanent residents earning between R3 501 and R22 000 per month, (the ‘affordable’ or ‘gap’ market). Individuals in these salary bands generally find it hard to qualify for housing finance; their income is regarded as low for mortgage finance, but too high to qualify for the government ‘free-basichouse’ subsidy scheme. FLISP enables qualifying beneficiaries to reduce the initial home loan amount or augment the shortfall between the qualifying loan and the total house price.
What to do with FLISP?
- Buy an existing, new or old, residential property;
- Buy a vacant serviced residential stand, linked to an NHBRC registered homebuilder contract;
- Build a residential property on a self-owned serviced residential stand, or tribal stand (PTO) through an NHBRC registered homebuilder.
The once-off FLISP subsidy amount ranges between R27960 and R121626, depending on the applicant’s monthly income.
Who can apply?
Applicants intending to acquire residential property may apply for FLISP if they meet the following qualifying criteria:
- South African citizen with a valid ID; or permanent residents with a valid permit;
- Over 18 years and competent to legally contract;
- Have never benefited from a Goverment Housing Subsidy Scheme before;
- Have an Approval in Principle of home loan from an accredited South African financial institution; and
- First time home buyer, earning from R3501 to R22000 per month.
The following CERTIFIED COPIES are required as supporting documents when applying for FLISP:
- RSA bar-coded Identity Document (ID)
- Bar-coded Permanent Residence Permit (where applicable)
- Birth Certificates/RSA ID’s of all financial dependants (where applicable)
- Proof of Foster Children Guardianship (where applicable)
- Marriage Certificate, Civil Union Certificate or Cohabiting Affidavit*, Proof of Partnership (applicable)
- Divorce Settlement (where applicable)
- Spouse’s Death Certificate (where applicable)
- Proof of Monthly Income
- Home Loan Approval in Principle/Grant letter from an accredited Lender
- Agreement of sale for the residential property
- Building Contract and Approved Building Plan (where applicable)
FLISP REDUCES the initial home loan amount making monthly loan repayment instalments affordable (payment made to home loan account)
SUBSIDY QUANTUM Example 1 is based on an R9 000 p/m income – band, where the individual after the Lender/Bank’s credit and affordability assessment, based on the National Credit Act (NCA) criteria,qualified for R300 000 home loan. FLISP AUGMENTS shortfall between the qualifying loan amount and the total product price (payment made to transfer attorneys)
SUBSIDY QUANTUM Example 2 is based on an R9 000 p/m income-band, where the individual after the Lender/Bank’s credit and affordability assessment, based on the National Credit Act.
The Lender/Assess home loan applications according to their own credit and affordability assessment standards and the National Credit Regulation’s lending criteria.
Option 1: Development Housing Projects Once Lender grants home loan approval or ‘approval in principle’,Developer submits the applicant’s completed FLISP Application Forms to the NHFC
Option 2: Open Market Once Lender grants home loan approval or ‘approval in principle’,applicant or Estate Agent completes the FLISP Application Forms obtainable from NHFC website, Human Settlement Provincial & Regional Offices and some Estate Agents