What is First Home Finance and how does it work?

Buying your first home is an exciting milestone, but it can also feel overwhelming. Between saving for a deposit, applying for a home loan and understanding the homebuying process, there’s a lot to think about. That's where First Home Finance can help.

First Home Finance is a government housing subsidy that helps qualifying South Africans buy or build their first home. If you meet the requirements, the subsidy can reduce the amount of money you need to contribute towards your home purchase, making homeownership more affordable.

What is First Home Finance?

First Home Finance is a housing subsidy offered by the South African government. It was introduced to help more South Africans become homeowners by providing financial assistance to qualifying first-time buyers. The subsidy is not a loan, so you don’t repay it. Instead, it is a once-off amount that can be used as part of the financing for your first home.

The amount you receive depends on your household income. In general, households with lower incomes qualify for a larger subsidy, while those with higher incomes receive a smaller amount.

Who can apply?

To qualify for First Home Finance, you must meet certain requirements. These include:

• You must be a South African citizen or permanent resident.
• You must be at least 18 years old and legally able to enter into a contract.
• You must be buying or building your first home.
• Your household income must fall within the qualifying income range.
• You must have an approved home loan or another approved form of property finance.

There may be additional requirements depending on your individual circumstances, so it's important to check the latest eligibility criteria before applying.

How does First Home Finance work?

The subsidy forms part of the funding used to buy or build your home. It is not paid directly to you as cash. A typical journey looks like this:

1. Find out whether you qualify for the subsidy.
2. Apply for a home loan or another approved form of finance.
3. Once your finance is approved, submit your First Home Finance application.
4. If your application is successful, the subsidy is paid towards your property purchase or building project.

The subsidy helps reduce the amount that needs to be financed, making it easier for many buyers to afford their first home.

Applying for a home loan and First Home Finance can seem complicated, especially if you're buying a home for the first time. BetterBond's experienced home loan consultants understand the First Home Finance process and can guide you every step of the way. From helping you understand whether you may qualify to assisting with your home loan application and supporting you through the subsidy process, they'll help make your journey to homeownership as simple and stress-free as possible.

Can First Home Finance be used for different types of properties?

Yes. Depending on your circumstances and the programme requirements, First Home Finance may be used to:

• Buy an existing home.
• Buy a newly built home.
• Purchase a home in a new housing development.
• Build a home on land you already own or have legally secured.

Each application is assessed individually, so it's important to understand the requirements before making any property decisions.

Why is First Home Finance important?

For many South Africans, saving enough money to buy a home can take years. Rising property prices and the costs involved in buying a home can make homeownership feel out of reach. First Home Finance helps bridge some of that gap. By reducing the amount you need to contribute towards your first home, the subsidy can make buying sooner a realistic possibility.

It also encourages responsible homeownership by working alongside approved home finance rather than replacing it.

What should you do before applying?

Before applying, it's worth taking a few simple steps:

• Check that you meet the qualifying requirements.
• Review your monthly income and expenses.
• Check your credit record and address any issues.
• Gather the documents you'll need for your application.
• Speak to a home finance expert if you're unsure about the process.

Preparing in advance can help your application move more smoothly.

Taking the first step

Buying your first home is one of the biggest financial decisions you'll ever make, but you don't have to navigate the journey alone. If you qualify, First Home Finance could make homeownership more affordable by providing valuable financial assistance towards your first property. Understanding how the subsidy works and preparing your application carefully can help you take the next step towards owning a place to call home.