To enable low- and middle-income people to become homeowners, the South African government has instituted several housing subsidy schemes. Formerly known as FLISP, the Finance Linked Individual Subsidy Program (FLISP) is one of the most well-known among these. This comprehensive guide will walk you through the eligibility criteria, application process, and benefits of the government housing subsidy in South Africa.
What is the Government Housing Subsidy?
The Department of Human Settlements grants once-off grants known as the government housing subsidy, most especially the Finance Linked Individual Subsidy Program (FLISP). It seeks to help first-time homebuyers who have obtained a house loan from a reputable financial institution and make between R3, 501 and R22,000 a month.
Depending on the applicant’s income level, the subsidy value falls between R30,001 to R169,264. The subsidy is more the lower the income. The house loan amount can be lowered, interest rates can be lowered, and monthly repayments can be more reasonably priced with this subsidy.
Eligibility Criteria for the Government Housing Subsidy
Applicators for the government housing assistance have to satisfy the following requirements:
Either own a permanent residency visa or be a citizen of South Africa.
Be competent to contract and over eighteen.
Your gross monthly household income falls between R3, 501 and R22,000.
Marry or cohabit, or single with financial dependents.
Never owned a fixed residential property prior; never got a government housing subsidy prior
It’s advisable to always check the present criteria with the pertinent authorities as the income level for the subsidy is changed on regular basis.
The Application Process for the Government Housing Subsidy
The government housing subsidy application process consists in numerous stages:
Get a house loan Approval in Principle (AIP). Applying for a house loan with an accredited financial institution comes first and results in an Approval in Principle (AIP). The FLISP application will call for these paperwork.
Finish the FLISP application process: You can start finishing the FLISP application form after you obtain the AIP. Your applicable Provincial Department of Human Settlements or the National Housing Finance Corporation (NHFC) will provide this form.
Compile the necessary supporting records. You will also need to submit the following supporting documentation along with the finished application form:
Certified copy of your ID card
Evidence of income (like letters from your company, bank statements, or payslips)
Proof of marriage (if relevant)
Documentation of financial dependents (should they be relevant)
AIP (approval in principle) for a house loan
Apply for it: You can apply to the NHFC or your pertinent Provincial Department of Human Settlements once you have finished the form and compiled all the necessary documentation.
Outcome and application processing: Your application will be handled by the NHFC, or Provincial Department, who will also let you know of the result. Should your application be approved, once your bond is registered the subsidy amount will be transferred into either your home loan account or the trust account of your attorney.
Although the whole application procedure usually takes twenty-one days, some financial institutions—including ooba Home Loans—can prequalify candidates in three days.
How to Use the Government Housing Subsidy
There are several ways the government housing subsidy could be applied to help homeownership:
Using the subsidies as a deposit allows one to lower the monthly repayments and home loan amount.
Part of the home loan can be paid off with the subsidy, therefore lowering the monthly installments and interest rates.
Building a house on a serviced residential site qualifies for the subsidy providing the site was not obtained under an earlier government housing subsidy.
The subsidy cannot be utilized for the acquisition of investment properties or vacation houses; it only qualifies for the purchase or construction of a main dwelling.
Advantages of the subsidy for government homes
First-time homebuyers get various advantages from the government housing subsidy:
Banks are more likely to approve house loan applications when the FLISP subsidy is available as they know of it.
Lowering interest rates and more reasonably priced monthly repayments follow from the usage of the subsidy as a deposit or to pay off a part of the home loan.
Enhanced affordability: The subsidy increases low- and middle-income homeowners’ access to a house who might not otherwise be able to purchase one.
Not necessary for a repayment: For first-time homebuyers, the FLISP subsidy is a great tool since it does not have to be paid back unlike a loan.
Housing Subsidy Status
These actions can help you to identify the state of your application for a housing subsidy:
Portal for Housing Subsidy: See the state of your application by visiting the Housing Subsidy Portal. Should you be unsure about the significance of the status codes, see a table supplied by the Department of Human Settlements (DHS).
Speak with the Helpdesk: To get particular information on the progress of your application, get in touch with the Western Cape Department of Infrastructure helpdesk. via phone at 021 483 6488, 021 483 8984, 021 483 0611, 021 483 0623, or 021 483 2060; via email at Human.Settlements@westerncape.gov.za.
Email info@dhs.gov.za with your ID number or call the Housing Hotline at 0800 146 873, accessible weekdays 6am to 10pm.
MEC for Housing: Approach the MEC for Housing in your province if you are not happy with the helpdesk or hotline reply.
See also: HSS House Waiting List
Frequently Asked Questions
Can I use the government housing subsidy to buy an existing house or apartment?
Yes, you can use the subsidy to buy an existing house or apartment, build a house on a serviced residential site, or buy a serviced residential site.
Do I need to be employed to qualify for the government housing subsidy?
No, you do not need to be employed to qualify for the subsidy. The eligibility criteria focus on your gross monthly household income, which can include income from various sources such as employment, self-employment, or government grants.
How long does the application process take?
The full application process typically takes around 21 days. However, some financial institutions, such as ooba Home Loans, can prequalify applicants within 3 days.
Can I apply for the government housing subsidy if I have already secured a home loan?
Yes, you can apply for the subsidy after securing a home loan. The application process involves submitting an Approval in Principle (AIP) from an accredited financial institution along with the completed application form and supporting documents.
Can I use the subsidy to buy a property from a family member or friend?
No, the government housing subsidy cannot be used to purchase a property from a family member or friend. The property must be acquired on the open market.
What happens if my income changes after I’ve received the subsidy?
If your income changes after receiving the subsidy, it will not affect your eligibility or the amount of the subsidy. The subsidy is a once-off grant that does not need to be repaid.
Conclusion
The government housing subsidy in South Africa offers a valuable opportunity for first-time homebuyers to achieve their dream of homeownership. Understanding the qualifying criteria, application process, and subsidy benefits helps low and middle-income workers to maximize this program and realize their dreams of homeownership.
Should you feel you are eligible for the government housing subsidy, it is advisable to investigate the application process and consult housing authorities and recognized financial institutions for direction. You can negotiate the procedure and get the money you need to be a homeowner with the correct knowledge and help.
