FINANCE MATTERS
Step 2 :
• Estate Agents are not to deviate from normal procedures but ensure that an application for FLISP forms part of the loan application . This is important as numerous prospective homebuyers might have already approached a lender . It is also possible that some smaller branches may not be familiar with all aspects of the FLISP .
• Developers may refer a prospective buyer to a lender / s but with the explicit request that the lender familiarises him / herself with the principles of the FLISP .
Step 3 :
• Interact with the lender to confirm a person ’ s qualification to the FLISP ( Qualification criteria is set out below ): ₀ An applicant is either a South African citizen or is in possession of a permanent residence permit .
₀ The applicant is of sound mind and legally competent to contract . That is , he or she is at least 18 years old ; and , if not , then is either legally married or legally divorced .
₀ Applicant or spouse has not previously received a housing subsidy from any sphere , arm or entity of government .
₀ Applicant or spouse has not previously owned a house . Registered owners of a PTO are not deemed to be house owners . Those in possession of a vacant or housing stand are also not deemed to be house owners .
₀ Applicant is : a . Married ( whether in terms of civil law or customary law ); or , b . Habitually cohabits with any other partner ; or , c . Single : ( 1 ) if not yet married , widowed , or divorced but with at least one financial dependant ; or ( 2 ) if an aged person who qualifies for the government ’ s old age social grant , whether he / she has financial dependants or not . d . The gross monthly income of the applicant ’ s household must be within the range determined by the Minister of Human Settlements and as specified in the FLISP Implementation Schedule that the Minister publishes on an ‘ as-and-when ’ basis . ( As specified in the FLISP Implementation Schedule that the Minister publishes on an ‘ as-and-when ’ basis , special dispensations are made for subcategories of FLISP beneficiaries , each with its own assessed set of challenges ).
Step 4 :
• Always remember that the lender will be responsible for assisting with the completion of a FLISP application form and to submit it to the National Implementing Agent .
Step 5 :
• It is important to take adequate steps to ensure that an application for FLISP is approved before the transfer of ownership . If this requirement is not met , the buyer will be disqualified from participating in the programme . The reason for the disqualification will be that at the time of the consideration of the FLISP subsidy application , the applicant was already a homeowner and as such did not meet the qualification criteria .
Step 6 :
• Should an estate agent or developer be faced with any uncertainty from other role players or have difficulties in assisting clients with their FLISP applications , they should consider contacting the relevant lender or the National Housing Finance Corporation ( which is the appointed National Implementing Agent ).
In terms of the processes for pension-backed loans or unsecured loans . An applicant making use of this type of financing instrument will be subject to the same qualification criteria and processes , as highlighted above , the difference being the source of finance . In the case of pension-backed loans , the relevant Pension Fund will in terms of their own criteria determine the level of assistance that will be provided to the applicant . Depending on the size of such a loan the homebuyer must then decide whether or not he / she wishes to obtain additional funding from another lender .
The FLISP Policy Guidelines still need to be formally approved by oversight committees within the National Department of Human Settlements and we , therefore , do not expect this to be approved before July 2021 , and only once the policy guidelines have been approved by the Minister , will FLISP applications be considered in the manner explained in this article .
6 MAY - JUNE 2021 SAAffordHousing saaffordablehousingmag SA Affordable Housing www . saaffordablehousing . co . za