The once-off FLISP amount ranges from R20 000 all the way up to R87 000, and is available on a sliding scale according to the applicant’s monthly income.
This is according to Mike van Alphen, National Manager for the Rawson Property Group’s in-house bond originator, Rawson Finance, who says that means that there are probably a great many prospective buyers who are still living in rented accommodation when they could already be living in their own homes and laying the foundation of their future wealth.
FLISP, which stands for Finance Linked Individual Subsidy Programme, was specifically devised for the gap market to assist those who earn too much to qualify for a free house from the government, but too little to qualify for a home loan in the normal way, to boost their buying power and become homeowners. But it seems far too few prospective buyers are aware of the scheme or how it works. Van Alphen says Rawson Finance has not had one individual FLISP application in the Western Cape to date, and only a few from developers who were looking for subsidies for people buying their new units.
“We are, however, assisting clients with the FLISP Guarantee in the Eastern Cape and our recent one, which was successful, showed the immense potential value of the scheme, because it literally enabled someone to purchase their own home, who would otherwise definitely not have qualified.”
The details of this instance, he says, were that the client wanted to buy a property for R200 000 with a 100% bond. She only qualified for a bond of R141 000. However, on her salary, she was also eligible for a FLISP amount of R70 000, and this, together with the bond, allowed her to buy the property and still have funds to put towards the transfer fees.
The FLISP applies to applicants with dependants, who are earning between R3 500 a month and R15 000 a month, and is flexible in that it can be used to help buy several types of property, including an existing, or pre-owned, home, a new home built by an NHBRC-registered home builder, a vacant stand linked to a building contract with an NHBRC-registered builder in a plot-and-plan development and a new home to be built by an NHBRC-registered home builder on a residential stand they already own.
In addition, it can be used as a deposit that will reduce the size of the loan required, and so make the monthly repayments more affordable. The once-off FLISP amount ranges from R20 000 all the way up to R87 000, and is available on a sliding scale according to the applicant’s monthly income. But there are a few more qualifying criteria to meet before one can access these funds.
To start with, an applicant must be a South African citizen with a valid ID, or a permanent resident, with a valid permit, over 18 years old and a first-time home buyer who has never previously been a recipient of any other government housing subsidy.
Secondly, the applicant must secure an ‘approval in principle’ for a home loan from a bank and find a property that is within their affordability range, and also in a formal town where the transfer of ownership and registration of the mortgage bond can be recorded at the Deeds Office.
“All of this of course involves quite a lot of paperwork and red tape, but most people would surely think it was worth taking the time to go through the process if it meant they could buy their own home,” Says Van Alphen.
“And a reputable bond originator is more than able and willing to assist prospective buyers to assemble all the financial documents and forms they need in order to apply for both a home loan approval and a FLISP subsidy.”
Alternatively, Van Alphen says FLISP applicants can obtain the required forms themselves from any regional or provincial office of the Department of Human Settlements, from a municipality or from their NHBRC-registered developer, and submit them for assessment to the National Housing Finance Corporation (NHFC) which administers the programme.