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WORDS: ANNE SCHAUFFER IMAGES: SHUTTERSTOCK

Flisp stands for Finance Linked Individual Subsidy Programme, a subsidy designed to help South Africans put a foot on the first rung of the property ladder. It falls under the umbrella of the Department of Human Settlements.

The subsidy for which you’re entitled can be used to reduce the initial mortgage loan amount. This makes the monthly loan repayment instalments more affordable over the loan repayment term, and makes good any shortfall between the qualifying loan amount and the total price of the property purchase.

The subsidy can also be used to pay for transfer and bond costs. Once your subsidy is approved, the funds will be paid to your transferring attorney’s trust account in readiness for the transfer of the property into your name. Rhys Dyer, CEO of bond originators ooba, explains the ins and outs.

Q: Who qualifies?

A: To qualify for Flisp, you must be a South African citizen – or hold a permanent residence permit – a first-time homebuyer, must be married/co-habitting/single with a dependant, and must have a total gross household income of between R3,500 and R22,000.

Q: How much is the subsidy worth?

A: The subsidy alters according to your income, in other words, it’s granted on an income sliding scale. The subsidies range between R27,960 and R121,626.

Q: What can the money be used for?

A: This subsidy can be used as a deposit which will assist you to qualify for a home loan and aid you in securing a better interest rate on your home loan, making your monthly instalment more affordable. Alternatively, the subsidy can also be used to pay for transfer and bond costs.

Q: How do I go about applying?

A: You must have an approved home loan before applying for the Flisp subsidy. The Flisp application form must be completed and submitted, together with all the supporting documents (listed on the application form), to the NHFC or to the relevant provincial department of human settlements’ offices. Once the subsidy is approved, the funds will be paid over to the transferring attorney’s trust account on notice of readiness to lodge the transfer and bond documents.

Q: Are there any important factors to remember?

A: To qualify for this subsidy, you or your spouse/partner mustn’t have previously derived benefits from the housing subsidy scheme or any other state-funded or assisted housing subsidy scheme which conferred benefits of ownership, leasehold or deed of grant. You mustn’t have received a government housing subsidy before, nor owned a fixed residential property before.

Importantly, if your home loan application is declined by the bank, you will not be able to access Flisp. So, once you know your income falls into the eligible band, take the time to access ooba’s online affordability tool on ooba’s website (ooba.co.za). It’s easy to fill in, and you’ll know in minutes what size home loan you will be eligible for, if you are approved.