Real Estate Investor Magazine South Africa October 2015 | Page 35

FINANCE

FLISP Firepower
Examining the FLISP subsidy benefits
for both the bank and the consumer
MEYER DE WAAL AND PAUL DE BEYER

O

wning your dream home is something many of
us aspire to, however there are can be so many
stumbling blocks along the way! Often we
are stifled by rising property costs, credit records and
the lack of funds to use as a deposit. The Department
of Human Settlements has taken it upon themselves
to help people reach their dream – this time through
something called FLISP.
FLISP ( Finance Linked Individual Subsidy
Program) was started to bridge the gap between those
who simply could not afford housing and those who
could. The subsidy is aimed at those who earn between
R3501 and R15 000 per month, have never benefitted
from any government housing scheme in the past,
and are preapproved for a home loan with a registered
financial institution. The subsidy can be anywhere
between R20 000 and R87 000, depending on your
affordability, and can be used as either a deposit to
secure the property or injected straight into your home
loan as a way to lower your overall bond repayment
period.

The FLISP subsidy can make a huge
difference to potential home owners
but is also appealing to banks and
other lending institutions.
One of the major stumbling blocks in buying a
property is having a large sum of cash to act as a
deposit to secure the property. “After the 2007/2008
economic downturn we realised that there were fewer
aspiring home owners able to meet the strict lending
criteria imposed by the banks,” Meyer de Waal, director
of conveyance law firm Oosthuizen and Co, explained.
“With banks seldom willing to offer 100% home loans,
many buyers just don’t have the capital to use as a
deposit. This is where things like the FLISP subsidy