In March, this year the National Minister of Human Settlements, Mmamoloko Kubayi announced that the Finance Linked Individual Subsidy (FLISP) has been delinked and is no longer just a mortgage only option.
Furthermore, partnerships were established with external role-players such as financial institutions, conveyancing attorneys and property developers, granting them access to the Housing Subsidy System (HSS) which allows them to capture and monitor the progress of applications. The result is a drastically improved turnaround time for processing these applications.
The FLISP programme is a housing subsidy to assist qualifying first-time home buyers with purchasing a home. The subsidy is paid directly to the conveyancing attorney or financial institution and can be used as a deposit to buy a home, or to pay such into an existing home loan and reduce the monthly instalments. Households with an income between R3 501 to R22 000 may qualify for the FLISP subsidy if they meet all the criteria, such being a first-time buyer with a financial dependent and a South African citizen. The current subsidies range between R121 626 to R27 960.00. This may also increase.
Since FLISP’s inception in 2005, the approval of the subsidy was always linked to “finance” in the format of an approved home loan from either one of the major financial institutions such as ABSA, Standard Bank, FNB, Nedbank or SAHL.
“Not anymore,” says Meyer de Waal, a conveyancing attorney of Cape Town whose mission it was over the past eight years to assist first time buyers to gain access to a home loan and assist with a FLISP subsidy application. “Often in the past, we considered giving up as the barriers to entry for a first-time buyer were too difficult to overcome,” says de Waal. “We welcome Minister Kubayi’s announcement and are glad that we persevered and today can provide a comprehensive FLISP first time buyer assistance that includes home loan and or non-mortgage linked finance application services.”
Over the past years partnerships in the private sector were established, and these are now the foundation of a comprehensive service to first time buyers mortgage originators, attorneys, estate agents as well as such service to the Department of Human Settlements and the NHFC to provide comprehensive FLISP application submissions.
ESTABLISHING PARTNERSHIPS IN THE PRIVATE SECTOR TO AID FIRST TIME BUYERS
De Waal and other attorneys reached out to other industry stakeholders in the legal fraternity, such as LexisNexis and formed a partnership with them to promote FLISP applications through their extensive conveyancing attorney network. With the Gawie Le Roux Institute of Law they hosted FLISP information sessions and more combined workshops are planned.
The Attorney Realtor Hub, through 13 branches on a national scale, are also assisting their buyers and sellers with this service.
Currently, only the Western Cape’s Department of Human Settlements allows for the payment of conveyancing fees from the FLISP subsidy proceeds. Often a buyer does not have the funds available to pay for conveyancing fees and it is expected that the new FLISP policy will be expanded on a national level to accommodate the payment of conveyancing fees as well.
FLISP CALCULATOR & FLISP PRE-QUALIFICATION VOUCHER BEFORE YOU BUY
According to the new National Housing Code, a FLISP pre-qualification guarantee can be issued to a first-time buyer by the Implementation Agencies appointed by the Government.
Jacques Theron of 4Me.Tech confirms that first-time buyers will now be issued with FLISP Vouchers before they start the home buying process. An applicant signs up on the online platform and answers a few qualifying questions, the technology does the rest and a FLISP Voucher is issued to provide an accurate estimate of the subsidy the home buyer can qualify for. The Flisp Voucher can then be validated through HSS integrations with the Department of Human Settlements or the systems of the NHFC as per a working relationship with these institutions.
NEXT STEP – WHAT FINANCE CAN ONE QUALIFY FOR?
A FLISP Voucher is the first step to take, and the first-time buyer can then establish how much finance can be obtained to buy a home with the combination of the FLISP subsidy and the finance options available for the applicants.
ONE STOP SHOP – ALL YOUR FINANCIAL SERVICES IN ONE
De Waal has developed a comprehensive one-stop-online platform which is available on https://www.mybondfitness.info/flisp
“Our online property finance pre-qualification estimator provides an outcome in real time and also provides a FLISP Subsidy Voucher that can be validated,” says Jacques Theron of 4Me.Tech.
Not only is the first-time buyer assisted to compare finance through a home loan, but also to all the non-mortgage linked financial services that will be available as from 1 April.
A first-time buyer, with no or little experience in buying a property and in shopping around for the most appropriate property finance, will be very confused if all the finance options are not presented on one easy to navigate platform. The applicants can compare the options and test it against their financial means before making the right individual choices for them.
CHECK BEFORE YOU BUY
For that purpose, the online platform includes a quick credit score and affordability self-check for the buyer. The outcome is available in real time and the data extracted from a business relationship with an established credit bureau.
All are available on one platform – click here to view.
WILL I QUALIFY FOR FINANCE TO UNLOCK MY FLISP SUBSIDY?
Raising finance, in any form, being a home loan or non-mortgage linked finance application, a first-time buyer will still have to comply with the strict rules of the lending practices and guidelines as per the National Credit Act.
“Up to 50 % of home buyers are unsuccessful from the start due to a low or a poor credit score,” says de Waal. “If I look at the +/- 340 000 applications which were processed over the past 36 months (about 3 years), more than 185 000 aspiring buyers were unable to even be considered for a home loan, due to a low, thin, or poor credit score.”
If a finance application is declined, a first-time buyer will not be able to receive a FLISP subsidy.”
RENT TO OWN & INSTALMENT SALES
“We are elated that the rent to own concept and instalment sales were also added in the National Housing Code,” says de Waal.
The Rent2buy program was developed in 2007 and is also geared towards helping first-time buyers to get their foot in the door to own their own homes. A year or two after that, instalment sales were also added to assist buyers to get their foot in the door.
“We already have access to non-banking finance available for buyers who struggle to convince a traditional bank to grant them a home loan,” says de Waal.
Enquires how to qualify for alternative finance can be directed online – click here.
WHAT CHANGED? – THE NEW DE-LINKED FLISP POLICY AS FROM 1 APRIL 2022
As from 1 April 2022, you no longer need a finance approval from one of the major financial institutions, explains Anele Matakane of MDW INC property & home finance services.
Now, a buyer can qualify for a first-time buyer FLISP subsidy if they have financial assistance to buy a property in the form of:
- the beneficiary’s pension/provident fund loan,
- a co-operative or community-based savings scheme, i.e., stokvel,
- the Government Employees Housing Scheme,
- any other Employer-Assisted Housing Scheme,
- an unsecured loan,
- an Instalment Sale Agreement or Rent-to-own Agreement.
“Our mortgage origination license with one of the largest mortgage origination companies provides financial assistance to up to eight traditional home loan lenders,” says Matakane.
This also includes non-mortgage finance which is a unique offering to the industry. All the property finance solutions are under one roof.
“For non-finance linked applications, we have taken hands with 4.Me.Tech to provide a one-stop-shop service to assist buyers with every type of finance solution available, all such types of finance that are now available with the National Housing Code.”
WHAT ABOUT LATE APPLICATIONS OR EXISTING HOMEOWNERS?
Unfortunately, many first-time buyers did not know about the opportunity to apply for a FLISP subsidy and never applied. However, this may now change with the new policy as retrospective applications may be considered as soon as the new guidelines are made available.
To add your name on a list to be advised when the retrospective policy is introduced, click here to add your name and details.
To check how much subsidy, you may be able to qualify for – click here
For any queries, please contact email@example.com
And view the following websites:
Chris Fick & Associates Inc. (www.chrisfick.co.za) &
Attorney Realtor Hub (www.attorneyrealtorhub.co.za)
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