First-time homebuyer benefits for South Africans

Article summary

• FLISP is a government subsidy aimed at first-time home buyers.
• It benefits first-time home buyers by improving their chances of home loan approval, and providing funds that can be used for a deposit or home loan repayment.
• The subsidy ranges from R30 001 to R130 000, depending on the size of the homebuyer’s income.

If you’re buying a house for the first time, you may find the process intimidating. The need to muster funds for the deposit; the tense wait for home loan approval.

However, first-time buyers will be encouraged to know that the South African government is subsidising home purchases for first-time buyers with low incomes (R3 501 to R22 000 per month).

The subsidy is known as FLISP (Finance Linked Individual Subsidy Programme) and first-time home buyers benefit from it in a number of ways.

First-time home buyer’s benefits provided by FLISP

FLISP can provide the following benefits to first-time homebuyers:

• It increases chances of home loan approval.
• It reduces interest rates.
• It can serve as a deposit.
• It can serve as an extra payment into your bond account and thus reduce home loan term and interest rates.

It increases the chances of home loan approval because the bank knows that you have funds to pay off the home loan thanks to FLISP.

It reduces interest rates by making you a lower risk, thus making the bank more likely to grant you favourable interest rates.

It can serve as a deposit. Deposits are the main barrier to entry for first-time homebuyers, many of whom find it challenging to muster the funds necessary to pay 10% of a home loan up front. FLISP provides funds that can be used for that purpose.

It can serve as an extra payment into your bond. Any amount you pay above the stand monthly repayment of your bond will naturally help you pay off the bond faster, and also potentially lower your interest rates. Use our Extra Payments Calculator to determine how much you can save on your home loan with an additional bond repayment.

How much is the FLISP subsidy?

The subsidy ranges from R30 001 to R130 000, depending on your income. The lower your income, the higher the subsidy.

See the chart below for more detail, and to get an idea of what you’ll be able to pay toward your deposit or home loan.

How do I qualify for the FLISP subsidy?

To qualify, you need to meet the following criteria:

• Your income must range from R3 501 to R22 000 per month.
• You must be a South African citizen with permanent residency in South Africa.
• You must not have received a government housing subsidy before.
• You must be married or cohabiting OR single with financial dependents.
• You must be over 18 years old.
• You must not have owned a fixed residential property before

How do I apply for FLISP?

You can apply with your financial institution or with the assistance of ooba Home Loans.

We make the application process easier by submitting the paperwork on your behalf and monitoring the status of your application.

See the application process below:

Are you interested in applying for FLISP? Get all your questions answered, such as whether you qualify, how to apply and how FLISP can be used to acquire your first home.