Government low cost housing: Own a home with FLISP

Article summary

• The government has established programs to provide affordable housing, whether you’re looking to rent or buy.
• The Social Housing Regulatory Authority (SHRA) invests in rental accommodation for low earners.
• However, buying is better than renting, and FLISP helps low-income earners achieve homeownership.

The South African Constitution is unique, in that it enshrines the right to a home.

Of course, the reality is that 12,7% of households still live in informal dwellings, while the rest struggle to gain access to affordable housing.

House prices have trended upward over the past few years, and to those with a low income, obtaining affordable housing may seem a distant dream.

But whether you’re looking to rent or buy, you have options available, thanks to government programs dedicated to providing affordable housing.

Measures to provide government low cost housing:

The South African government continues to develop strategies for addressing this issue. Current measures that are relevant to home seekers include:

1. Affordable rental housing.
2. Home ownership subsidies via FLISP (Finance Linked Individual Subsidy Programme).

1. Affordable rental housing

The Social Housing Regulatory Authority (SHRA) is responsible for investing in the affordable rental housing market. The rental accommodation is aimed at the upper end of the low-income market (R1 850 — R22 000).

They are also authorised to hold landlords to certain standards and ensure tenants are treated correctly.

Government funding is provided to accredited institutions that manage the rental units. This enables them to charge lower rent.

In order to qualify for the program, you need to meet the following criteria:

• You’re a South African citizen or have a permanent residency permit.
• You’re 18 years or older.
• You’re married or living with a partner.
• You’re single or divorced, and have proven financial dependants permanently living with you.
• Your monthly household income is between R1 850 and R22 000 before deductions.

You can apply for the service with the Social Housing Institution (SHI), who will then evaluate you to determine whether you meet the requirements.

2. FLISP: A home ownership subsidy

Any investor will tell you that owning a home is better than renting. You pay less in the long-term for a home loan than you would in rental expenses, and once the home loan is paid off, you’ll possess a powerful asset.

Home ownership is a reality even for low earners, thanks to FLISP. The subsidy is aimed at home buyers with an income of R3 501 to R22 000 per month.

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

This subsidy can be used as a deposit or paid into your home loan, reducing your monthly repayments and interest rates.

You need to meet the following criteria to qualify for FLISP:

• 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 fund FLISP

You used to require home loan approval before applying for FLISP. Thankfully, the program has made it easier to acquire funding. Sources you can use include:

• the beneficiary’s pension/provident fund loan
• a co-operative or community-based savings scheme, i.e. stokvel
• the Government Employees Housing Scheme
• any other Employer-Assisted Housing Scheme
• an unsecured loan
• an Instalment Sale Agreement or Rent-to-own Agreement

How do I apply for FLISP?

You can apply with the help of ooba Home Loans, a home loan comparison service dedicated to earning home buyers the best deal on their home loan.

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.