Recently there have been a few changes in the Finance Linked Individual Subsidy Programme (FLISP). The programme is a grant from the government to help first-time homebuyers own their own homes. Let’s look at some of the changes that have taken place and will come into effect from 1 April 2022.
A home loan no longer a requirement
Acquiring a home loan from one of the major financial institutions (FNB, ABSA, Nedbank, Standard Bank and SAHL) has always been a requirement to qualify for the subsidy programme. You first had to be approved for a home loan before applying for FLISP. Additionally, you had to hand in your approved bond quote with your subsidy application.
However, the FLISP has been delinked from home loans and is no longer a mortgage-only option, as announced by the Minister of Human Settlements, Mmamoloko Kubayi. This means that you can qualify for the subsidy without having to qualify for a home loan first.
- There are now other options available to people, such as:
- the beneficiary’s pension/provident fund loan,
- a co-operative or community-based savings scheme loan, i.e. stokvel,
- the Government Employees Housing Scheme loan,
- any other Employer-Assisted Housing Scheme loan,
- an unsecured loan,
- an Instalment Sale Agreement or Rent-to-own Agreement.
Thanks to this amendment, you may now apply for the FLISP subsidy funded by any one of these loan types as well, to own your own home.
Partnerships
Over the last couple of years, Meyer de Waal, a conveyancing attorney and director of MDW Inc in Cape Town, has built partnerships with many stakeholders to increase the amount of FLISP applications throughout the country.
Over the past eight years, he has assisted many people in applying for the FLISP subsidy. Furthermore, he has developed a few specialised programmes to assist homebuyers in South Africa to buy their first property, improve their credit records, and to apply for the FLISP subsidies successfully.
Additionally, MDW Inc has partnered with the Gawie le Roux Institute of Law to hold information sessions for attorneys. These sessions are in the form of a webinar, presented by Meyer de Waal on 21 April and 13 May 2022. If you are an attorney, conveyancer or conveyancing secretary, we recommend that you attend this webinar to learn how to assist clients in applying for FLISP without all the paperwork.
Turnaround time
In this story about Thumeka, a domestic worker who purchased her own home with the help of FLISP, the time she waited to get the payout almost cost her her home.
However, in an effort to improve the turnaround time, MDW INC and the National Housing Finance Corporation (NHFC), who pays out the FLISP subsidies, have partnered to offer all MDW INC customers access to the programme. MDW INC has also been given control over the application process, which decreases the turnaround time.
Other things that have decreased the turnaround time is pre-vetting of applicants and proper customer engagement.
Late applications
Many first-time homebuyers who did not know about the subsidy, did not apply for it.
Those who applied after date of transfer were declined as the retrospective FLISP policy up to 31 March 2022 only applied for homeowners in the Western Cape and KZN. New homeowners in the rest of the country were excluded up to 1 April 2022.
However, this may soon change as on a national basis, retrospective applications will be considered once the new guidelines are made available.
So, if you have already purchased your property, but meet the qualifying criteria of the subsidy, be sure to apply for it as soon as you can. To get your name on the waiting list to be notified when the applications open - Click here.
Transfer costs – Good news for conveyancing attorneys
Up to 31 March 2022, transfer fees (attorney transfer and bond fees) could not be paid out of a FLISP subsidy, unless one purchased a property in the Western Cape, or the property was purchased from a property developer and all costs of transfer were included in the purchase price.
As from 1 April 2022, transfer and bond costs can now also be paid out from the FLISP subsidy.
This is fantastic news for conveyancing attorneys, as often first-time buyers do not have the funds saved up to pay for conveyancing fees and the registration of the transfer of a property or a mortgage bond registration is delayed.
One-Stop shop
Jacques Theron of 4Me.Tech, working close to MDW INC, developed a one-stop shop, where you may apply online for the FLISP Subsidy Voucher. On their website, you can complete a few questions, and the system will issue you with a FLISP Voucher to give you an estimation of how much subsidy you are likely to qualify for.
It is here that you can be issued with your FLISP Voucher which you can use to apply for a home loan for the property that you would like to purchase. The voucher is then validated through an integration with the Department of Human Settlements or the NHFC. This voucher accurately reflects the amount that you are likely to qualify for your FLISP subsidy.
You can then use your voucher to see how much you qualify for the purchase of your home and this includes the FLISP amount, the home loan amount that you qualify for, and any additional money available (such as a deposit).
Rent to buy
Rent to buy and instalment sales have been added in the National Housing Code. Rent to buy is a creative property buying innovation by the MDW Inc.
This solution allows you to rent a property, where you pay your intended bond amount, levies and taxes, while improving your credit score until you can afford to buy the home. When you are ready to buy, you may exercise the option to purchase the property.
The good news is that the new FLISP policy will allow you to receive the subsidy even if you purchase a home in this way. So if you are keen to purchase through the Rent2Buy or Instalment Sale programme, be sure to apply for FLISP and sign up for Rent2buy & Instalment Sale Finance – click here to sign up.
FLISP application form for 2022
The FLISP Application form for 2022 can be downloaded here for free.
You can even apply online for your own FLISP subsidy.
Read more about FLISP
To read more about the FLISP subsidy, including how to qualify and the steps in applying, read our other blog here.