The dream of owning property is a dream wished by many but only afforded by a few in the South African economy. With interest rates having skyrocketed, the past few months have made it even more difficult for middle and low-income earners to juggle everyday expenses.
If you form part of the middle to low-class earner bracket and would like to move from being a tenant to owning your own property, the South African government has a subsidy that may assist you.
Below is all you need to know about the Finance Linked Individual Subsidy Programme also known as FLIPS, provided by the Department of Human Settlements.
The Finance Linked Individual Subsidy Programme is a subsidy established by the government which aims to provide poor and low to middle-income households with access to adequate housing.
Qualifying households for this subsidy are those in the gap market that is – those that do not qualify for a fully subsidised house and at the same time they do not qualify for mortgage loan from the banks. These are families earning between R3501.00 and R22000-00 per month.
Individuals who are unable to secure a mortgage loan may apply for the allocation of a vacant serviced stand. The subsidy will be used to decrease the mortgage bond and is only applicable to persons who have never been assisted by the state. It will be disbursed as a once off subsidy towards the repayment of the bond. The subsidy attaches to the beneficiary and not to the property.
The subsidy may be used:
- To buy new or old residential property
- To buy a vacant serviced residential-stand, linked to an NHBRC registered homebuilder contract; or
- To build property on a self-owned serviced residential stand, through an NHBRC registered homebuilder
