Estate Living Magazine Design for living - Issue 42 June 2019 | Page 38

I N V E S T
&
FLISP
D E V E L O P
MAKING
HOMEOWNERSHIP A REALITY FOR
LOWER INCOME HOUSEHOLDS
Empowering first-time homeowners with a one-off government-funded subsidy
The Finance Linked Individual Subsidy Programme (FLISP) offers
an amazing opportunity for qualifying individuals to own their first
property. is implemented on a sliding scale and ranges between R27,960 and
R121,626 based on the gross monthly household income, with the
highest subsidy available to the lowest earners.
It’s unfortunate that the details and implications of FLISP are not
commonly known, and that there are some misconceptions about
its process and value. The benefits, however, are huge, and estate
agents and those involved in financing have a crucial role to play in
educating prospective buyers and assisting in the process. We all
have a role to play in sharing our knowledge about FLISP to ensure
the information is spread, and that it reaches those who can benefit. Who qualifies?
As the banking sector plays a vital role in borrower education, we
asked Xoli Ndwandwe, Head of Affordable Housing at Nedbank, to
share some of what Nedbank is doing.
What is FLISP?
XN FLISP is a government-driven subsidy programme that aims to
empower first-time home buyers. This programme aims to bridge
the affordability gap when buyers purchase a property that is
financed by a lending institution. The subsidy money can be used as
a deposit, or to finance some of the upfront bond-related costs, but
this may differ in different provinces. The positive element about the
programme is that any South African who qualifies for a bond can
get the subsidy, provided they meet the requirements. The subsidy
XN FLISP subsidies are available for first-time home buyers with a
combined household income between R3,501 and R22,000 per
month. The purchase must be financed (as this subsidy is finance
linked), and the buyer must be a South African citizen and be mar-
ried, cohabiting or single with a dependant. It’s important to note,
too, that the new buyer should never have owned property before
(even if in a previous marriage) and should never have benefited
from a similar subsidy before, e.g. an RDP house. Home buyers who
have recently taken transfer and meet the qualifying criteria may
also apply but the backdating of the subsidy is applied differently in
each province, so whether or not you qualify may depend on where
you live.
What are the benefits of FLISP?
XN The most obvious benefit is to the new buyer who can now per-
haps afford a two-bedroom house as opposed to a a one-bedroom
house. They may, however, stick to their first choice of home and
simply make it more affordable on a month-to-month basis. A pur-
chase price of around R680,000 can be achieved for households
earning a total gross income of R22,000 per month (based on a 20