Being a homeowner is the dream of so many people, but the reality is that entering the property market can be very expensive.
Prices have undoubtedly ballooned over the years and the idea of owning your own home has floated away too. But all this can change with the help of a little-known subsidy programme.
You might think you need millions, but FLISP – Finance Linked Individual Subsidy Programme – enables someone who earns as little as R3 501 per month to enter the property market.
Specifically designed for lower- and medium-income earners, FLISP may be the answer to a potential homeowner’s dream.
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What is FLISP?
The programme is designed to promote homeownership and is managed by the Department of Human Settlements and the National Housing Finance Corporation (NHFC).
It was initially introduced by government in 2012, but many people have never heard of it.
Essentially, this subsidy is for you if you fall into the affordable or gap market. This is people whose income is generally regarded as too low to apply for a bond (mortgage finance) but too high to meet the government’s requirements for free basic housing.
How does it work?
Your monthly salary determines the size of the subsidy.
From a minimum of R27 960 to a maximum of R121 626, it can be used for the purchase of “an existing, new or old residential property” or “a vacant serviced residential stand” or you can put the money towards the cost of building a residence on a piece of land you currently own.
You can only apply for a subsidy once you’ve found a property you can afford to buy and a lender (probably a bank) that’s prepared to finance the purchase.
Then you can use your FLISP subsidy as a deposit on your first home, to shorten your home loan repayment period, or lower the monthly repayment amounts.
The cherry on top is that you don’t have to pay one cent back!
How to qualify for a FLSP subsidy
- You must earn between R 3 501 and R 22 000 per month.
- You must obtain approval for a home loan from your bank.
- Your application can be made once you’ve found a property you’d like to purchase.
- The subsidy can amount to anything between R27 960 and R121 626 and will be determined by your salary.
- The subsidy is a one-time payment. You can’t apply for it if you want to purchase a second home.
- You must be a South African citizen, 18 years or older.
- You must be married, cohabiting, or be a single person with a dependent.
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