Real Estate Investor Magazine South Africa May 2016 | Page 30

EDUCATION

SERIES PART 1

Understanding the

FLISP Grant
An Exercise In Social Upliftment
BY MEYER DE WAAL

W

e all do a lot of shouting about the
government these days. However, there
are plenty of government initiatives that
truly aim to uplift South Africans and help them
reach goals that might not always seem possible.
The FLISP (Finance Linked Individual Subsidy
Program) is one of these initiatives. Effectively
FLISP is the bridge between those who qualify for
free, low-cost housing and those who can afford to
purchase property on their own.
In order to qualify for a FLISP grant you need to tick
a few boxes:
• Be a South African citizen (or a registered, legal
permanent resident)
• Be over 18 years of age
• Earn between R3501 and R15000 per month.
This is a combined household income if you are
married
• Be a first time home buyer with dependents
• Never benefitted from any other government
housing scheme
• Have a pre-approved home loan from a registered
financial institution
“The major problem with the FLISP grant is that very
few South Africans actually know about it,” FLISP
expert Verna Pugin explained. “By not knowing
about the grant many eligible people are losing out on
tens of thousands of Rands. The long term benefits of
that money could shave years off your bond term or
reduce your overall monthly repayment to a far more
affordable number – something even more prevalent
after the recent interest rate hikes.”
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MAY 2016 SA Real Estate Investor

The major concern amongst FLISP experts is
that public awareness is so low, while the developers
and real estate agents in-the-know steer clear of
the subsidy completely. “There is a general dislike
for FLISP in the industry,” Meyer de Waal, a
conveyancing lawyer and staunch FLISP promotor in
Cape Town said. “The difficulty comes in when sales
are delayed due to waiting on the FLISP money to
come through. Unfortunately, developers and sellers
are often unwilling to wait simply because there
is often a slow timeframe when it comes to getting
the money.” These problems can be overcome if the
potential Flisp applications are identified timeously
and managed properly, says Meyer. The preparation
of the Flisp application and the home loan application
must be managed by a team that fully understands
the entire Flisp application and processing journey,
says Meyer, otherwise the Flisp approval by the
Government may be delayed.
There is a second solution to this problem –
retrospective applications. In most provinces you can
apply for your FLISP grant after you have purchased
the home. Using the money to lower your overall
bond payment or repayment time frame is one of the
more powerful ways of utilizing the grant, and with
retrospective applications this is usually the only way
to do so.
“In the Western Cape you can apply for your FLISP
grant up to 12 months after the date of transfer, “
Meyer went on to explain. “However, each province
has its own regulations on this. For example, Gauteng
only allows 3 months, while the Free State up to 24
months after you have taken ownership.”

RESOURCES
Rent2Buy
www.reimag.co.za