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First-time home buyers grant for South Africans

This government subsidy offers those earning less than R22,000 a realistic prospect of homeownership, in the form of a first-time homebuyers grant.

First-time Home Buyers Grant

Article summary

  • FLISP is a government programme that grants a subsidy to first-time homebuyers earning between R3,501 and R 22,000 a month.
  • However, the homebuyer must first qualify for a home loan, and must be either married, cohabiting or single with at least one dependant.
  • Millennials and Gen Z should seize this opportunity to get out of the rent trap.

For first-time homebuyers, and especially millennials who fear being caught in the rent trap, the government programme FLISP (Finance Linked Individual Subsidy Programme) makes acquiring a home a realistic prospect for low-income earners. If you earn between R3,501 and R22,000 a month, you stand to benefit from this programme.

More about FLISP, and how it works as a first-time homebuyer subsidy

FLISP 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 age of rising house prices and cost of living, this is a significant boon for first-time homebuyers.

What do you mean by a subsidy?

To put it simply, if you meet the criteria, the government provides you with money to help buy a home. This subsidy does not need to be paid back, and there is no catch.

However, you will have to meet the following criteria:

  • A household income that falls between R3,501 and R22,000 per month.
  • Must be a South African citizen over the age of 18.
  • You must be either married, cohabiting, or single with at least one dependent.
  • If you’ve benefited from a previous government housing programme or subsidy, this disqualifies you from applying for FLISP.
  • You must have already had a home loan approved by the bank.

The last point is particularly important, as it means you need to apply for a home loan and have it approved before you can apply for FLISP. You can use ooba home loans’ free, online tool, the Bond Indicator, to find out your credit record, and thus determine your chances of acquiring home loan approval. There are also a number of measures you can take to improve your credit record if it is too low.

How big is the subsidy?

This depends on your income and the lower it is, the higher your subsidy. You can use the subsidy calculator on the FLISP website to determine how much you will receive from this programme. This is how it works (source):

  • R121,626 subsidy for a household income of R3,501 to R3,700.
  • R102,893 subsidy for a household income of R7,101 to R7,300.
  • R27,960 subsidy for a household income of R21,801 to R22,000.

Can I use the subsidy granted by FLISP as a deposit?

You can indeed use the subsidy granted to pay for the deposit on the home, earning more favourable interest rates in the process.

If you’re aiming for a 100% home loan, without a deposit, FLISP still benefits you by providing cash that can be paid into the home loan immediately. It also provides resources to help pay additional costs of buying a home, such as transfer fees and conveyancing fees.

How do I apply for a FLISP subsidy?

Once you’ve been approved for a home loan, you can apply for a FLISP subsidy at your local Department of Human Settlement office, or by contacting the National Housing Finance Corporation.

How FLISP helps millennials, and others stuck in the rent trap

The media consensus on millennials and Gen Z is that they long ago abandoned the prospect of homeownership, and resigned themselves to an eternity of rent. However, FLISP provides them with a means to get out of the rent trap.

Of course, for many millennials, it’s the fear of commitment that makes them reluctant to buy a home, as well as the financial issues. But it makes more sense in the long-term to take the opportunity and buy a home while you can. Rental prices are hard hit by inflation, and you’ll end up paying more in the long-term than what you would for a mortgage.

If you’re interested in seizing the opportunity offered by a program like FLISP, bear in mind that the first step is to apply for a home loan. South Africa’s largest home loan comparison service, ooba home loans, can help you get the best deal by applying to multiple banks on your behalf. They also offer a range of tools that make the home buying process easier. Start with their home loan calculators; then use their free, online prequalification tool, the ooba Bond Indicator, to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.

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