The Finance Linked Individual Subsidy Programme (FLISP) was first introduced in 2012, but the recent budget speech announcement by the Minister of Human Settlements, Mmamoloko Kubayi-Ngubane that it would be delinked as a ‘home-loan only’ option, coupled with an increase in the annual tax-free threshold for persons under the age of 65 (from R87 300 to R91 250), is set to fast-track homeownership for many hopefuls.
ooba Group has partnered with the National Housing Finance Corporation (NHFC) to make the dream of homeownership a reality for first-time homebuyers who may not have been able to attain a home loan in the past.
This has been made possible through the government introduced Finance Linked Individual Subsidy Programme (FLISP) that looks to close the gap in the home buying market. “South African first-time homebuyers with either a single or joint gross monthly household income of between R3 501 and R22 000 can qualify for FLISP,” explains Jackie Smith, Head of Product for ooba Group.
“These announcements are welcomed by the affordable housing market, especially our qualifying customers. Ensuring that a subsidy is no longer dependent on a home loan is exactly what the market needs.”
“The subsidy ranges from R27 690 to R121 626 for an existing home or a home that still needs to be built (off-plan). In addition, homeowners who purchased their first home in the past 12 months can also apply, should they meet the criteria,” explains Smith.
“In the past, these homebuyers would be rejected by the banks due to affordability but thanks to FLISP, the shortfall (including costs such as bond registration and conveyancing fees in some cases) can be covered through this subsidy.”
Qualifying Criteria for FLISP
“Potential homebuyers who require a mortgage can work with ooba Group to determine their eligibility through a prequalification. This entails checking their credit score, making sure that their paperwork is in order and determining what finance amount they will be approved for by the banks (and the government) prior to submitting the paperwork to NHFC.”
Qualifying criteria for FLISP is as follows:
- Proof of an approved home loan
- Signed Agreement of sale
- A building contracted and approved building plan (where applicable).
- A South African identity document.
- Identity documents for all occupants.
- A marriage certificate (where applicable).
A Need for Urgency and Collaboration
Smith believes that while the government recognises the need to make homeownership attainable to everyone, there is still an urgent need to improve the overall turnaround times.
“A safe, affordable house is a right that should be afforded to all South Africans, concludes Smith. “A strong partnership between the public and private sectors can help fast-track and streamline the process further.”
READ MORE: How to property search like a pro