The National Housing Finance Corporation (NHFC) is meant is assist people who earn between R3,500 and R22,000 – known as the “missing middle” – to buy a house.
People in this income bracket often find it difficult to afford a house through a bank bond or are too “rich” to qualify for an RDP house.
Qualifying individuals or households should have monthly incomes of between R1,500 and R15,000.
The NHFC administers the Finance Linked Individual Subsidy Programme (FLISP), which is one of the few options they have to achieve their dream of owning a home.
The applicant must first apply for a bond with a financial institution before taking this route.
According to NHFC’s website, depending on the applicant’s gross monthly income, their once-off FLISP subsidy qualifying amount may vary between R27,960 and R121,626.
FLISP allows qualifying beneficiaries to reduce the initial mortgage loan amount or augment the shortfall between the qualifying loan and the total house price, bringing the eventual home loan instalment to an affordable amount over the loan repayment period.
Applicants must be first time home buyers, South African citizens with an ID, or a permanent resident and older than 18.
They must have financial dependants and must not have benefited from any government housing subsidy scheme before. Applicants must be able to prove two years of continuous employment and demonstrate the ability to service the loan.
An applicant may be subjected to credit record check.
The subsidy can be used to buy new or old residential property; buy a vacant serviced residential-stand; build a property on a self-owned serviced residential stand; and build a property on a tribal stand available through permission to occupy.
Applicants can visit www.nhfc.co.za for more information.