Buying a first home can feel out of reach, particularly for households that earn too much to qualify for social housing but too little to comfortably afford a home loan. FNB has addressed this with a new initiative that could help some of these buyers take that first step.
The bank has launched its HomeFirst Grant, which offers qualifying first-time buyers a once-off capital reduction of up to R67,706 on their home loans. Importantly, this is not a loan, and the money does not have to be repaid. Even more significantly, eligible buyers may be able to combine it with the government's First Home Finance (FHF) subsidy, formerly known as FLISP.
The initiative comes amid substantial unmet housing demand, with approximately 3.4 million households registered for government housing assistance, while the estimated national housing backlog stands at around 2.6 million homes.
How does the FNB HomeFirst Grant work?
The HomeFirst Grant is funded by FNB and is intended to help first-time buyers who have a shortfall between what they can afford and what they need to qualify for a home loan.
The grant is applied directly to the FNB home loan as a capital reduction, reducing the amount that needs to be financed.
Although the maximum grant is R67,706, the amount awarded depends on the buyer's qualifying income bracket and remaining affordability shortfall. To be considered, buyers must:
- Be first-time home buyers.
- Have a gross monthly household income of between R3,501 and R22,000.
- Have an affordability shortfall.
- Meet FNB's relevant home loan qualifying criteria.
There is no separate application. Qualifying applicants are automatically assessed as part of their FNB home loan application. The grant is also available to qualifying buyers whose employers offer housing schemes.
However, receiving the grant does not guarantee home loan approval. Applicants must still pass the bank's normal affordability and credit assessments.
Can you combine it with the government subsidy?
One of the most significant aspects of the FNB initiative is that it can be used alongside the government's FHF subsidy, which helps qualifying households buy their first home. The subsidy amount depends on the applicant's income, with lower-income households generally receiving more assistance.
Private Property asked Chris Labuschagne, Managing Executive of FNB Home and Structured Lending, whether a buyer could receive both subsidies for the same property purchase.
"Yes. A qualifying buyer may benefit from both First Home Finance and the FNB HomeFirst Grant. If an affordability shortfall remains after the FHF subsidy has been applied, the HomeFirst Grant can help cover that gap up to a maximum of R67,706 and subject to the relevant qualifying criteria," he confirms.
The two forms of assistance serve slightly different purposes. The FNB grant is applied directly to the home loan as a capital reduction, while FHF may also be used towards certain approved costs associated with the property purchase.
"Receiving the FNB HomeFirst Grant does not affect a customer's eligibility for First Home Finance. Each has its own qualifying criteria, and qualifying customers may benefit from both," says Labuschagne.
The combined assistance is not a fixed amount, as it depends on the buyer's income, the subsidy awarded, and the remaining affordability shortfall.
What happens if the government subsidy has not been approved?
Where both forms of assistance are needed to make the purchase affordable, both must be secured before bond registration. However, there is another possibility.
"If First Home Finance is not approved and the customer still qualifies for the FNB HomeFirst Grant, and the grant sufficiently addresses the affordability shortfall, the home loan may proceed without the First Home Finance subsidy," says Labuschagne.
This is worth discussing with the bank early in the process, particularly if a buyer is relying on both forms of assistance.
What other benefits does FNB offer?
The HomeFirst Grant is part of a broader package of benefits available to qualifying customers:
- A 50% discount on bond registration attorney fees.
- FNB Home Rewards vouchers worth up to R7,000, redeemable at selected retail partners.
Buyers should still budget for other purchase costs, including transfer-related expenses where applicable, moving costs, insurance, rates and ongoing maintenance.
Why is this intervention important?
FNB says the initiative responds to affordability constraints and the shortage of affordable housing stock. CEO Lytania Johnson says the grant is intended to make homeownership more accessible and help more people build assets and improve their financial security.
"At FNB, we believe that financial inclusion is about more than access to financial services. It is about creating opportunities that enable people to participate meaningfully in the economy, build assets and improve their long-term financial wellbeing," she says.
Labuschagne says addressing the housing challenge requires cooperation between the public and private sectors. "South Africa's housing challenge is fundamentally driven by two realities: affordability constraints and an insufficient supply of affordable housing stock. While economic growth remains essential to improving household affordability, we also need practical interventions that enable more people to access the formal housing market today," he says.
Although financial assistance cannot resolve the shortage of affordable homes, initiatives such as this could help more households enter the formal property market.
Could you qualify?
If you are planning to buy your first home, investigate whether you qualify for both FHF and the FNB HomeFirst Grant.
To qualify for First Home Finance, applicants must generally:
- Be South African citizens or qualifying permanent residents.
- Be at least 18 years old.
- Be first-time home buyers who have never owned a property.
- Have a gross monthly household income of between R3,501 and R22,000.
- Not have previously benefited from a government housing subsidy.
- Have an approved home loan in principle.
You should also speak to FNB about your affordability, whether you have a shortfall and whether you could qualify for both subsidies. The HomeFirst Grant is not a replacement for a home loan or a guarantee of approval. Rather, it offers qualifying buyers additional financial support to help make a purchase possible.
