Government’s Flisp subsidy helps individuals in the “gap” market purchase homes

If your household earns a combined sum of less than R22 000 per month, you may qualify for the Finance Linked Individual Subsidy Programme (Flisp) that was introduced by the South African government in 2012.

While Flisp isn’t new, the upper income threshold for the programme has been increased since its inception and first-time buyers in the “gap” market now stand a greater chance to qualify for the subsidy.

This subsidy is available to individuals whose combined gross household income falls between R3 501 and R22 000 per month. Essentially, it’s targeted at a “gap” market that earns too much to qualify for free government homes but earns too little to invest in property without the intervention of financial help.

Subsidies are granted using a sliding scale that’s based on the applicant’s income and can range anywhere from R27 960 to R121 626.

To qualify for this government subsidy, buyers must meet the following criteria:

  • Have an approved home loan
  • Have proof of South African citizenship
  • Be over the age of 18
  • Be married, co-habiting or single with a dependent.
  • Have no background history of receiving a similar subsidy

If a Flisp application is approved, recipients can use the subsidy to pay a home loan deposit or to decrease the size of a home loan. It can also be used to cover the costs of a home transfer or a bond registration.

You will need at least 30% of your income available to cover your new monthly home loan instalments.

If you are happy with your financial status, you can move on to look for a property that you can afford. Once you have found a home, you will need to sign an offer to purchase and then wait for home loan approval.  

If your home loan is approved, you can submit your Flisp application. You can apply directly to the Department of Human Settlements in the Western Cape and the Free State as well as to the National Housing Finance Corporation if you live in Gauteng or KwaZulu-Natal.

Your application will be forwarded to the relevant banks for final approval, and you will be contacted to determine how to best utilize your grant.