The policy document has finally been released! In his State of the Nation address in February 2012, South African President Jacob Zuma announced an extended FLISP subsidy policy. The key principles of this policy include the following:
- Income eligibility: households earning between R3501 – R15 000 per month are eligible to apply.
- Property value: the FLISP subsidy can only be used to buy a house costing R300 000 or less.
- Value of the subsidy: the subsidy amount available is inverse to the households’ income and ranges from R87 000 for a household earning R3501 to R10 000 for a household earning R15 000 per month.
- Conditions: households can only access the subsidy if they tie it together with a mortgage to buy a new house in an approved project for less than R300 000. In the previous FLISP design, households were required to provide a deposit – this has been waived. The FLISP can be used to meet any deposit requirement for a mortgage loan.
- Exception: households earning between R3501-R7000 who are unable to obtain mortgage finance may decide to apply for a serviced stand. This will be made available to them for free, as their once off subsidy, as part of the Integrated Residential Development Programme.
This policy is effect from 1 April 2012. In the short term, it is only available for new housing delivered through NHFC-approved pilot projects, one in each of the nine provinces. In the longer term, it is hoped that the policy applies also to affordable housing in the resale market. There are a few blogs on the subsidy on this website.