Answer to a question from a reader

Can I get a government loan to buy a municipal house if I am unemployed but have some money saved?

The short answer

Most banks want you to show proof of two years of continuous employment to qualify for a loan.

The long answer

As you probably know, if a person earns over R3,500 a month, they would not qualify for an RDP house.

For people who earn more than R3,500 but less than R22,000, which is generally what the banks would consider a minimum amount for agreeing to a bond or home loan, there is a government subsidy known as the Finance Linked Individual Subsidy Programme (FLISP). FLISP gives you a grant that can be used to reduce the initial loan amount. This will make your monthly FLISP repayments lower. It can also be used as a deposit. 

To qualify for the FLISP subsidy, the house you wanted to buy would have to be your first own home and you could not have received a government housing subsidy before, like an RDP house. This would equally apply to a partner or your spouse that was applying with you.

In order to get the FLISP subsidy you need to have applied for a home loan, either from a bank or a company that offers home loans like SA Home Loans.  

To apply for a home loan, you would need:

  • Certified copy of your South African ID or passport/permanent residence permit;

  • Copy of your signed Offer to Purchase the house or property;

  • Proof of your current residential address;

  • Official salary slip or stamped bank statement showing the last three months of income.

The problem for you would be that you are not working, though you have some money. Most banks will want you to show proof of two years of continuous employment and to have a good credit record for you to qualify for a home loan. If they refuse to give you a home loan, you will not be considered for the FLISP subsidy. 

If, however, the bank or home loan company did agree to give you a home loan, you would have to do the following:

  • Ask for an “Approval in Principle” letter from the bank;

  • Register on the FLISP website: or go to your municipal offices to register for a FLISP grant;

  • Compile the following certified documents for your application:

    • Home Loan Approval in Principle letter from your bank;

    • Completed FLISP application form available from National Housing Finance Corporation (NHFC) website;

    • RSA ID document or permanent residence permit;

    • Certified copies of birth certificates/RSA IDs of all your dependents, and proof of foster children guardianship (where applicable);

    • Proof of marriage, civil union or partnership (an affidavit can be done for the latter);

    • Divorce settlement (where applicable);

    • Spouse’s death certificate (where applicable);

    • Proof of monthly income;

    • Agreement of sale for the property or building contract and approved building plan (where applicable).

Once this is done, your completed FLISP application will be sent to the National Housing Finance Corporation to be processed.

Wishing you the best,

Answered on Dec. 10, 2021, 10:26 a.m.

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Please note. We are not lawyers or financial advisors. We do our best to make the answers accurate, but we cannot accept any legal liability if there are errors.