Starting the process of buying a home at Walmer Link

Step by Step Guide:

Step 1: Determine your FLISP eligibility

You need to satisfy all the FLISP Subsidy requirements which have been set out under qualifying criteria above. If however you are not sure of whether you comply with the FLISP criteria, you are free to contact or visit the office of The Home Market on site at Walmer Link.

If you satisfy all the FLISP requirements you may move to the next step.

NOTE: Compliance does not guarantee that you will receive a FLISP Subsidy as your application requires the approval of the National Housing Finance Corporation (NHFC), the Department of Human Settlement (DoHS) and a Home Loan from a Lender (Bank).

Step 2: Establish what you can afford

The Home Market has made provision for 5 basic house types with varying prices as set out under homes on offer.

Two things need to be established before you can make a housing choice of the unit which best suits your ability to make sustained payments to a Bank against a Home Loan.

You will need to establish which incremental band category you fall into on the FLISP Subsidy table. This table consists of 115 incremental bands. Download/view Pdf

You will then have to read off the amount which you are entitled to within your income band. For example, if you earn R7500 per month you will fall into income band 40 and you will be eligible for a FLISP subsidy of R60 675 from the DoHS.

Terms of FLISP

• You will need to qualify for a Loan from a Lender (Bank) so you will need to satisfy the qualifying criteria of the Bank which you choose.
• A FLISP Subsidy is a once-off payment in favour of Qualifying Beneficiaries who have not previously received any other state-assisted housing.
• A FLISP Subsidy may not be used to make an Access Bond Facility available to an Applicant.
• A FLISP Subsidy is available to first time home owners whose monthly income is between R3 501 and R15 000 per month.
• A FLISP Subsidy can be used only to reduce the principal Loan amount in order to make the Home Loan repayment installments affordable.
• The Purchase Price of the home may not exceed R300 000 inclusive of V.A.T.
• Sale of the property before 8 years will attract certain requirements, chief of which is the portion of the FLISP Subsidy amount to be refunded from the beneficiary which will decrease annually on the following basis:

Should the Beneficiary be able to purchase a residential property within 2 years, the amount retained can be transferred to the new loan application so as to reduce the new loan amount. Please note that the beneficiary loses this right after 2 years.

Step 3: Determine what you can borrow from the lender (bank).

You will need to determine how much you can borrow from a Bank to make up the funding gap of the Purchase Price minus the FLISP Subsidy amount.

As a rough guideline, your installment should never exceed 25% to 30% of your regular income before tax and deductions. It is best to be conservative and the lower this installment to income ratio the better.

The following table gives some idea of the maximum loan amounts and installments for income levels within the FLISP Subsidy Income Bands of R3 501 – R15 000 per month.

Because the Walmer Link Housing Project is an accredited FLISP Development, the maximum house price cannot exceed R300 000. The entry level unit price is set at R182 000.

Click here to view a table that gives an approximate idea of affordability based on an installment to income ratio of 20% to 30%. Please note that the table is only an indication and represents the FLISP Subsidy income bands in increments of R1 000.

Step 4: Choose a house type which suits your living and financial requirements

Once you have established from the FLISP Subsidy table the amount of subsidy you will be entitled to and have calculated, in accordance with your current financial position, how much you can borrow from a Lender (Bank), you are now in a position to choose a house from the 5 basic options available. This Bank Loan maximum amount linked to your income will determine the range of options. The less you earn the narrower the range of housing options will be.

Step 5: Sign an offer to purchase

Once you have decided on the house type you would like to buy and can afford, you will need to complete an Offer to Purchase document also known as a Deed of Sale. This is a written Agreement between Buyer and Seller stating the terms and conditions under which you agree to the buying and selling of the property. The Offer to Purchase will be between you and The Home Market.

Step 6: Complete the home loan application form and the FLISP application form

The Home Market will assist you in completing the Home Loan application form and the Finance Linked Individual Subsidy Programme Subsidy application form.

The Home Loan application will go to the Lender (Bank) together with the Offer to Purchase for final credit evaluation. The Lender will conduct an assessment of the property in order to ensure that there is sufficient value to cover the Home Loan prior to arranging the Home Loan.

The Lender will notify the Borrower and The Home Market that the loan has been approved.

The application for the FLISP Subsidy is then submitted by the Developer to the NHFC following the approval of the Home Loan by the Lender. The Lender's approval is subject to the approval of the FLISP Subsidy.

The NHFC notifies the MEC of the DoHS that the application is procedurally correct and that the applicant complies with the criteria for the FLISP Subsidy. The DoHS then informs the NHFC of the formal approval of the FLISP subsidy.

The NHFC issues the required guarantee to the Lender.

Please note that legal action against a potential Beneficiary may be taken by the MEC of the DoHS if any information supplied in the application for the FLISP Subsidy is incorrect or fraudulent and the MEC may also institute criminal changes.

The Home Market will assist a prospective applicant to fill in and sign all necessary documentation.

Step 7: Registration process

The following entities are involved in the Registration Process.

• The Seller (The Home Market)
• The Buyer (You)
• A Transferring Attorney (Appointed by the Seller)
• A Bond Attorney (Appointed by the Lender)
• NHFC and DoHS (FLISP Subsidy)
• Lender (Mortgage Bond)

Once the Home Loan and the FLISP Subsidy have been approved, Bond and Property Registration takes place.

The following steps are taken:

1. The Seller advises the Transferring Attorney to transfer the property. The Transferring Attorney completes the draft Title Deed and includes any relevant conditions set out in the Offer to Purchase.
2. The Bond Attorney advises the Transferring Attorney of the amount available for guarantees and requests the draft Title Deed and guarantee requirements.
3. The Transferring Attorney requests the Buyer and the Seller to sign transfer documents. The Buyer pays the Transfer Costs to the Transferring Attorney.
4. The Buyer signs the Bond registration documentation and pays the Bond Registration costs whereupon the Bond Attorney prepares and issues the necessary guarantees, forwards them to the Transferring Attorney, and prepares the Bond documents for lodging with the Deeds Office.
5. The Transfer and Bond Documents are lodged simultaneously at the Deeds Office. The Deeds Office takes about three to four weeks to check the Documents before they are ready for registration by the Attorney on the same day.
6. On the day of Registration, the Lender pays the Seller in accordance with the guarantees issued.

The entire Registration process usually takes three to four months.

Please note that the Walmer Link Project is a Pre Sell and Construct (Plot and Plan) project and allowance must be made for the time needed by The Home Market to construct your house. The construction process could occur simultaneously to the Registration Process.