- The South African government is required by the constitution to provide affordable housing, which it attempts to do through programs such as the Social Housing Institution (SHI) and the FLISP subsidy.
- The SHI can help you acquire low-rent accommodation, while FLISP subsidises home ownership.
- Homeownership is the superior option to rented accommodation as it costs less in the long-term than monthly rent, and will grant you a powerful asset.
Unlike many other countries, the South African government is obligated by its constitution to provide housing for its citizens.
This is especially the case in an age when house prices are on the rise and affordable housing is difficult to find.
We discuss two programs through which the government pursues this objective:
- Social housing (rentals for low income earners).
- FLISP (homeownership for low income earners).
1. Social housing
A rental or cooperative housing option for households earning between R1 850 — R22 000 per month.
Unlike FLISP, which we’ll discuss later, the govermment doesn’t fund you directly, but rather provides the funding to the social housing institution that manages the rental unit.
This subsidy allows the institution to charge lower rent.
How do I qualify for social housing?
You qualify if:
- Your household earns R1 850 – R22 000 per month.
- 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.
How do I apply for social housing?
You can contact the Social Housing Institution (SHI), where you’ll be screened to see if you qualify. The forms are available from the Social Housing Institution.
FLISP: Homeownership subsidy
The Finance Linked Individual Subsidy Programme (FLISP) aims to help low-income earners achieve homeownership, rather than rented accommodation.
Homeownership is the dream for many South Africans. Purchasing a home will cost you less in the long-term than renting one, and once you own it you have a powerful asset that can be passed down through the family or used as a form of equity.
Via FLISP, the National Housing Finance Corporation (NHFC) distributes funds directly to you. You can use this subsidy as a deposit, or pay it into your home loan to reduce monthly repayments and interest rates.
Use our Extra Bond Payment Calculator to determine how a FLISP subsidy will affect your home loan repayments.
How do I qualify for FLISP?
- You must have an income of R3 501 — 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 much is the subsidy?
The subsidy ranges from R30 001 to R130 000, depending on your income. The lower your income, the higher the subsidy. See more detail below:
How do I apply for FLISP?
Applying for FLISP is easier in that you can do it through a home loan comparison service such as ooba Home Loans, or through your bank.
Applying through a home loan comparison service is useful as they will help you earn the best deal on your home loan while at the same time submitting your application for the FLISP subsidy and monitoring its progress.
A home loan comparison service submits your home loan application to multiple banks, allowing you to compare deals and choose the best one. The FLISP subsidy already makes the bank more likely to grant your home loan; add in the option to choose from multiple packages and you’re likely to earn a good deal with low interest rates.
If you choose to apply with ooba Home Loans, see the application process below.
It should be clear that FLISP is the stronger option for those seeking affordable housing. Why rent when you can own?
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.
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