We 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.”
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.”