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First-time homebuyer benefits for South Africans

Buying your first home can be an intimidating process, but these policies make the dream of home ownership a reality for first-time homebuyers and low earners.

First Time Home Buyers Benefits South Africa

Article summary

  • FLISP is a government program that subsidises homebuyers with low income.
  • The 100% home loan removes the obstacle of having to pay a deposit.
  • The low interest rate in South Africa makes it the ideal time to pursue home ownership.

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 homebuyers will be happy to know that the South African government, along with various home loan providers, have introduced a number of policies that support first-time homebuyers.

These policies will play an essential role in revitalising the housing market following the impact of Covid.

How the South African government helps first-time homebuyers

Government subsidies make homeownership a reality for low-income earners. One example is FLISP.

FLISP

FLISP (Finance Linked Individual Subsidy Program) is a government subsidy, designed to help medium to low-income earners. It originally only provided for those who earned less than R15,000 a month, but since July 2018 that number has been raised to R22,000. In this tumultuous economic era, this is a significant boon for first-time homebuyers.

The subsidy is paid into your account, reducing your monthly home loan installments. In order to qualify you:

  • Need a household income that falls between R3,501 and R22,000 per month.
  • Must be a South African citizen over the age of 18.
  • Must be either married, cohabiting, or single with at least one dependent.
  • Must not have benefitted from a previous government housing programme or subsidy.
  • Must have already had a home loan approved by the bank.

The size of the subsidy depends on your income; the lower your income, the higher the subsidy. You can apply for a FLISP subsidy at your local Department of Human Settlement office, or by contacting the National Housing Finance Corporation.

100% home loan

Another boon for first-time homebuyers is the 100% home loan, which removes the need for a deposit. With interest rates in South Africa at their lowest point in decades, a home loan that requires only monthly installments can save money in the long-term due to favourable interest rates.

Of course, your chances of qualifying for the 100% home loan depends on having a good credit score.

Taking the first step

Though you may have considered homeownership an unaffordable dream until now, hopefully the support for first-time homebuyers has encouraged you to finally take a step towards homeownership. If that is the case, bear in mind that ooba Home Loans offers a range of tools that can make the home buying process easier. Start with their Bond Calculator, then use the ooba Home Loans Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.

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