A Gauteng man’s dream of owning a house has been delayed by a government subsidy scheme for more than a year, despite having an approved bank bond and making R23,000 deposit.
For months, Alfred Lusu, 37, a municipal health and safety officer, has been squatting with friends while his new home at Savanna City, south of Johannesburg, has been waiting for him to take occupancy since December.
He alleged that the red tape at the National Housing Finance Corporation (NHFC), better known as FLISP (Finance Linked Individual Subsidy Program), has delayed him from taking ownership of the house.
The two-bedroom home was built through Cosmopolitan Projects, a low-cost housing concept with several villages across the province.
Lusu applied for a house through Cosmopolitan in November 2019 and his application was sent through several banks for bond application.
In March, Cosmopolitan informed him that Home Investment Partners (part of Old Mutual) had approved his bond. It would cover 80% of the R459,000 purchase price.
As per norm, Lusu was expected to pay a deposit and then also apply for subsidy through FLISP to make up for the remainder of the R66,000 needed to buy the house. He also paid a R23,000 deposit.
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“Cosmopolitan had already identified the land and a house for me near Walkerville and Orange Farm. I liked the area because it was close to my work and far from shacks. It looked quiet and peaceful and very ideal for me,” Lusu told Sowetan.
He then applied to FLISP in September, but his application was declined on the basis that he had listed a dependent that had an existing property. He changed the dependents and reapplied a few weeks later, but says he never received an outcome.
FLISP programme manager Mathews Sidu provided Sowetan with a printout of the outcome of the original application and said his office has not been able to reach Lusu, hence the delay.
“Kindly note as per conversation between you [Sowetan], the client and myself today, the first FLISP application was declined (see attached), I have since requested the client to send a new application today with new details as he is changing some details on the original application which resulted to a decline. This application will be processed and we will send him an outcome,” wrote Sidu.
Lusu admitted to erroneously putting a relative as beneficiary who already had a house and said he tried to fix the matter. “For months I’ve been trying to get results of my second application and I even had to make an affidavit to prove that my dependent relied on me financially. It’s been very difficult for me to get any answers from FLISP.
Alda Erasmus, spokesperson for Cosmopolitan, confirmed Lusu’s ordeal. “His FLISP application was declined by the NHFC on 9 Sep 2020 with the reason provided that the dependent he listed on his application already has a property. That is not allowed according to the FLISP qualifying criteria.
"He reapplied on 28 Sep 2020 and is still awaiting the NHFC’s reply on his second application. The construction of the house which he is interested in buying was completed in December 2020 but to date, he has not been able to fully secure the funds to complete the transaction,” said Erasmus.
Lusu said he would reapply with FLISP.
Who qualifies for housing subsidy
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.
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