Bridging the socio-economic gap: ooba Group partners with NHFC through FLISP

ooba Group has partnered with the National Housing Finance Corporation (NHFC) to assist first-time homebuyers, who may not have been eligible for a home loan in the past, through the Finance Linked Individual Subsidy (FLISP) which looks to close the ‘gap’ in the homebuying market.

South African first-time homebuyers with either a single or joint gross monthly household income of between R3 501 and R22 000 can qualify for FLISP”, explains Jackie Smith, Head of Product for ooba.

FLISP was introduced in 2012, but the recent budget speech announcement by the Minister of Human Settlements, Mmamoloko Kubayi-Ngubane that it would be delinked as a ‘home loan-only’ option, coupled with an increase in the annual tax-free household for persons under the age of 65 (from R87 300 to R91 250), is set to fast-track homeownership for many hopefuls.

These announcements are welcomed by the affordable housing market, especially our qualifying customers. Ensuring that a subsidy is no longer dependent on a home loan is exactly what this market needs”.

The subsidy ranges from R27 690 to R121 626 for an existing home or a home that still needs to be built (off-plan). In addition, homeowners who purchased their first home in the past twelve months, can also apply, should they meet the criteria”, explains Smith.

Speaking to the partnership between ooba Group and NHFC, Smith says that potential homebuyers will benefit from being prequalified prior to starting the application process – for free.

We work with the potential homebuyer to establish whether they qualify for FLISP and what amount they will be approved for”.

In the past, these homebuyers would be rejected by the banks due to affordability but thanks to FLISP, the shortfall (including costs such as bond registration and conveyancing fees in some cases) can be covered through this subsidy”.

According to Smith, potential homebuyers purchasing their first home and requiring a mortgage, can work with ooba to determine their eligibility through a prequalification. “Here, we check their credit score, make sure that their paperwork is in order and determine what finance amount they will be approved for by the banks (and the government) prior to submitting the paperwork to NHFC.”

The qualifying criteria for FLISP is as follows:

  1. Proof of an approved home loan.
  2. Signed Agreement of Sale.
  3. A building contracted and approved building plans (where applicable).
  4. A South African ID.
  5. ID documents for all occupants.
  6. A marriage certificate (where applicable).

Smith believes that while the government recognises the need to make homeownership attainable to everyone, there is still an urgent need to improve the overall turnaround times.

A strong partnership between the public and private sectors can help fast-track and streamline the process further,” she concludes.