First time buyers: do you qualify for a FLISP subsidy?

Private Property South Africa
Martin Hatchuel

South Africans who fall into the "affordable market" now qualify for the government's Finance Linked Individual Subsidy Program. Find out what the FLISP subsidy is, and if you could qualify for one as a first time home buyer.

Many first time buyers in South Africa who earn between R 3,501 and R 15,000 per month can now enter the property market - and even save thousands on their bond - thanks to the Government’s Finance Linked Individual Subsidy Program (FLISP).

The programme was developed by the Department of Human Settlement specifically to help first time buyers, who are South African citizens and holders of permanent residence who fall into the ‘affordable market’ - also known as the ‘gap market’ - people whose income is generally regarded as too low to apply for a bond (mortgage finance), but which falls above Government’s requirements for free basic housing.

Although the subsidy was introduced in April 2012, uptake has been slow.

According to the Centre for Affordable Housing in Africa, “over twenty percent of South Africa’s population earns in the income bracket defined by the new subsidy.” Yet in its 2014 Yearbook Housing Finance In Africa (.pdf, 11.9 mb), the Centre noted that, “Between April 2012 and March 2014, only 1,696 FLISP subsidies were extended – a fraction of what was available in the budget. This represents only four percent of total mortgages extended by the private sector in 2012 and 2013, or 11 percent of total mortgages reported as in the FSC market by BASA.” (FSC = the Financial Sector Charter, whose Code “Commits all participants to actively promote a transformed, vibrant and globally competitive financial sector that reflects the demographics of South Africa;” BASA = the Banking Association of South Africa.

READ MORE: Starting point tips for first time home buyers.


As a first time home buyer, you could qualify for the Finance Linked Subsidy Programme if you’re 18 or older; you’re “competent to legally contract;” you fall into the designated earnings bracket; you have dependants; and you have already obtained a bank’s approval in principle for a home loan.

Although the Programme was initially available only on certain, designated properties - and only on properties that cost less than R 300,000.00 - the Director General of the Department of Human Settlements, Thando Mguli, removed these restrictions in August 2014, and qualifying buyers can now apply for assistance “to acquire any formal residential property.”


The size of the subsidy is determined according to monthly income - from a minimum of R 20,000.00 to a maximum of R 87,000.00 - and it can be used for the purchase of “an existing, new or old residential property” or “a vacant serviced residential stand” - or you can put it towards the cost of building a residence on a piece of land which you currently own.

But you can only apply for a subsidy once you’ve found a property that you can afford to buy - and a lender (bank) that’s prepared to finance the purchase.

The Programme is administered by the National Housing Finance Corporation SOC Ltd. (NHFC), which accepts and assesses application forms which must be submitted by a regional or provincial office of the Department of Human Settlements, a municipality, an estate agent, or a developer.

Payment is made according to your needs: if you’re going to use it to “make good any shortfall between the qualifying Loan amount and the purchase price of the Unit,” it’s paid into “the transferring Attorney’s trust account on notice of readiness to lodge the transfer documents” - but if you’re going to use it to “reduce the principal Loan amount to render the Loan repayment installments affordable,” it’ll be paid “directly into [your] home loan account.”

Do you qualify for a FLISP subsidy?

  1. You must earn between R 3,501 and R 15,000 per month, and be 18 years or older
  2. You must obtain approval for a home loan from your bank
  3. Your application can be made once a property that you would like to purchase has been found
  4. The subsidy can amount to anything between 20,000.00 and R 87,000.00 and will be determined according to your monthly salary.

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