FREQUENTLY ASKED QUESTIONS
First Home Finance, was developed by Government to help affordable first time home-ownership opportunities to South African citizens and legal permanent residents who earn between R3 501 and R22 000 per month. This is the ‘affordable / gap’ market segment; whose income exceeds the maximum income for a ‘Free House’ Housing Subsidy Scheme, but is not enough to qualify for home loan finance from the independent banks/lenders.
What comes first the Home loan application or the First Home Finance application?
At the point of applying for the First Home Finance subsidy, you will be asked to produce ‘proof of home loan grant’ or an ‘approval in principle’ from an accredited bank/lender. However, you can find out the amount of First Home Finance subsidy you qualify for, before you start applying for a home loan, the information may help with your home loan negotiation with the bank/lender.
How does the Subsidy Quantum work?
Depending on your monthly income, the FLISP subsidy amount you qualify for may range from R27 960 up to R121 626 – see the FLISP Subsidy Quantum Table for more information.
Is it possible not to qualify for First Home Finance at all?
Yes. If you do not meet the specified First Home Finance Qualifying Criteria and requirements, you will not be considered for First Home Finance
Are banks aware of First Home Finance?
Most accredited South African banks/lenders know about First Home Finance, but it will help you even better to find out more about First Home Finance before you visit your bank/lender.
What if I do not qualify for First Home Finance what happens to the home loan?
Should you not qualify for a First Home Finance Subsidy, you may continue the home buying process with the bank. The banks/lenders conduct their credit and affordability assessments on home loan applications, based on the National Credit Act (NCA) criteria.
What if I have been declined by banks, will I still get the subsidy?
The First Home Finance Subsidy is linked to you being financed by an accredited South African bank/lender, without an approved home loan or approval in principle you cannot receive a First Home Finance subsidy. However, make sure you understand the reason the bank declined your home loan application, so you can take proactive measures to rectify the situation, if it is within your means.
What if the bank declines my home loan application, because of over commitment, not because of a bad credit record?
Over commitment is an affordability issue. Find out if the bank is willing to offer you any amount as a home loan, the First Home Finance Subsidy may augment the shortfall between the qualifying loan amount and the total property price. However, also consider adjusting your financial commitments to favourable NCA affordability assessment levels.
If one`s shortfall exceeds the First Home Finance subsidy allocation, what happens then?
In addition to the First Home Finance Subsidy, you will have to cover the shortfall balance for the bank/lender to proceed with the home loan grant.
Is there an expectation to repay the First Home Finance subsidy at some stage?
No, you will not be asked to repay the First Home Finance subsidy.
Is it possible for one to buy an RDP house using a First Home Finance subsidy?
Yes, you can buy an RDP house using a First Home Finance Subsidy. However, you should note that the owner of an RDP house cannot resell the property before an 8year period has elapsed.
Can one qualify for IRDP and First Home Finance as well? (What is IRDP?)
Can I still apply for a First Home Finance subsidy even if I receive a housing allowance from my employer?
Yes, you can if you meet the First Home Finance Qualifying Criteria.
Can I still apply for the subsidy if I already own a house?
No, it is a First Home Finance Qualifying Criteria that you must be a first time home owner to be considered for a First Home Finance Subsidy.
Can someone, now divorced, apply for First Home Finance if they had benefitted while they were married?
No, it is a First Home Finance Qualifying Criteria that you must never have benefited from any Government Housing Subsidy Scheme before, to be considered for a First Home Finance Subsidy.
Can we as a couple access First Home Finance if one of us had received an RDP/ subsidy/ house prior to marriage?
Couples married under civil or customary law will be assessed as a unit and therefore would not qualify. It is a First Home Finance Qualifying Criteria and requirement that you must never have benefited from any Government Housing Subsidy Scheme before, to be considered for a First Home Finance Subsidy.
What if I have my own land, can I access First Home Finance?
The First Home Finance Subsidy may be used to build your own residential property on a self-owned serviced residential stand, through an NHBRC registered home builder.
Property bought together with a family member, would one qualify?
Yes, you can buy a property jointly with a family member, that is if all the required criteria are met, amongst them, that you are both first time buyers, your joint income does not exceed R22 000, that you both have never benefitted from any Government Housing Subsidy Scheme before. If you have a bank approved joint home loan, your First Home Finance application will be considered on its merits.
Where does one find out about available First Home Finance projects in their area?
Visit or call any Human Settlement Office closest to you, or the National Housing Finance Corporation will provide you with information about First Home Finance Projects in all the Provinces: Call Centre – 0860 011 011 email address – First Home firstname.lastname@example.org or website – www.nhfc.co.za
For how long will First Home Finance be availed to the public?
First Home Finance is a Housing Program present Government based on its National Housing Code. The time span is not specified and therefore wholly dependent of Government Budget and Policy.
How long does it take to process the application?
It takes the NHFC about 7days to process your subsidy application – that is, if you count from the point of receiving a fully completed application form with attachments of all required supporting documents (excluding your home loan application with the bank)
What if I do not like the houses in a First Home Finance Accredited development? Can I still receive First Home Finance subsidy for a house in a location of my choice?
You have two options for acquiring a residential property with the First Home Finance subsidy; you could choose a house from the various First Home Finance Accredited Development Projects or from the Open Market – meaning you can choose a new or old house that meets the First Home Finance criteria in any area of your choice.
Till what age can I apply for a subsidy?
The minimum age is 18 years and does not have a maximum ‘cut off’ age. If you can get a home loan approved from a bank then you will qualify for a subsidy.
Do I qualify for a subsidy if I was married and bought a property with my then husband? I am now divorced?
That depends on how you were married (i.e. COP/ANC etc.) and in whose name was the property registered. If you were married COP, then the property would be automatically registered in both you and your husband’s name and therefore you will not qualify (not a first time home buyer).
Can I qualify for the subsidy if I have cash to pay 80% of the required amount? I do not want to get a mortgage loan
No, First Home Finance is designed to only assist people who have obtained a mortgage loan.
What happens with my First Home Finance subsidised house when I pass on (die)?
Most financial institutions require that an approved home loan applicants to take up a Credit Protection Insurance (CPI) to the value of the home loan. This insurance covers you in the event of death, disability and/or retrenchment. CPI will pay off the balance of the home loan should you die; and if you do not have that insurance or any other means for the repayment of the loan balance when you die, the bank will sell the house to recover its loan balance. First Home Finance is not a repayable subsidy; we will not try to recover the subsidy monies after your passing.
What happens with my First Home Finance subsidised house if I lose my job?
Most financial institutions require that an approved home loan applicants to take up a Credit Protection Insurance (CPI) to the value of the home loan. This insurance covers you in the event of death, disability and/or retrenchment. CPI will pay your home loan monthly repayment instalments for a certain number of months, depending on the terms and condition of your insurance. First Home Finance is not a repayable subsidy; we will not try to recover the subsidy monies when you lose your job.
Will I still qualify if I cancel my ‘rent to buy’ lease and apply for a bond?
Yes, provided you meet First Home Finance qualifying criteria.