Real Estate Investor Magazine South Africa June 2016 | Page 34

FINANCE

FLISP

The Benefits of the FLISP Grant
BY MEYER DE WAAL

W

hile FLISP might not be every developer’s
cup of tea, many should consider it more.
The bonus for any developer is that the
buyer who is looking to buy, with an eye on using the
FLISP grant, is actually a more attractive prospect,
once all the home loan and Flisp preparation is done
in advance, before the aspiring home buyer approaches
the sales agent or property developer.

The major concern amongst FLISP
experts is that public awareness is
so low, while the developers and
real estate agents in-the-know steer
clear of the subsidy completely
This is mainly down to the fact that, as part of the
criteria, the buyer will then already be pre-approved
for a home loan and virtually Flisp as well. This
immediately reduces the risk to the developer as it
means that not only does this buyer have sufficient
funds available, but they have also been thoroughly
vetted through the bond application process.
As the transfers of most developments are done
in ‘bulk”, it is of utmost importance that the Flisp
applications are managed on a very strict time-line
and process.
While FLISP cannot be directly used to pay
transfer or legal costs, it can be used in the case of a
development where all the costs are combined. This is
an added bonus to those looking at buying off-plan, as
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JUNE 2016 SA Real Estate Investor

these kind of costs are often forgotten and can cause
significant financial strain later on the buyer.
A FLISP buyer is also attractive to lending
institutions as the knowledge that a sizable amount of
money will be coming into the bond early on lowers
the monthly repayments and reduces the risk of a
default.
“FLISP is almost an untapped resource when it
comes to developers and agents,” Verna said. “It’s not
only the general public who are uneducated when it
comes to the grant - we do workshops with those in the
property industry, informing them on the advantages
of FLISP and how it can help their business.”
2016 has had a bumpy start, with many indications
pointing to further interest rate hikes that could
impact property sales. Utilizing government subsidies
like FLISP could well be that added cash injection
that closes more deals than not. For more information,
head to www.flisp.co.za.

WHAT IS FLISP ALL ABOUT
Flisp is an initiative driven by the Department of Human
Settlements to assist qualifying households who have secured
a mortgage bond to acquire a residential property for the first
time. The objective of the program is to reduce the initial home
loan amount to render monthly installments affordable over the
loan repayment term

RESOURCES
Rent2Buy
www.reimag.co.za