How to make buying your first home easier

Buying a home for the first time is life-changing. Owning an asset of that value can improve life for you and your family, and you can take pride in the accomplishment.

But the path to home ownership can be difficult for most South Africans and permanent residents – especially those in the so-called ‘gap market’. You’re in the gap market if you have a job and an income high enough to disqualify you from a housing grant or a free RDP house, but you don’t make enough money to be eligible for an ordinary home loan from the bank. If your income is between R3,501 and R22,000 a month, you are in the gap market.

Fortunately, you could now qualify for First Home Finance (FHF) – a government subsidy programme that makes home ownership easier.


What is FHF and how does it work? 

Previously known as the Finance-linked Individual Subsidy Programme (FLISP), FHF is a one-time housing subsidy to help those in the qualifying income bracket buy or build their first homes. If you qualify, FHF can help you get a home loan from any registered home finance provider. It is available in both urban and rural areas, and building loans granted by community cooperatives and stokvels may also qualify.

The subsidy can help you pay less on your first home loan and attorney fees, or it can cover the difference between the loan you qualify for and the purchase price.

With an FHF subsidised loan, you can:

  • buy an existing residential property,

  • buy a vacant, serviced residential stand, linked to a contract to build a home with a builder registered with the National Home Builders Registration Council, or

  • build a residential property on a self-owned, serviced residential stand.


Even if you earn above the FHF income range, you can still get a better deal on your first home loan


How do I qualify for FHF?

To qualify, you must:

  • be a South African citizen or legal permanent resident,

  • have a monthly household income of between R3,501 and R22,000,

  • not have received previous assistance from a government housing initiative,

  • have been approved, in theory, for a home loan by a reputable South African financial services provider, and

  • be buying property for the first time.


What is your home subsidy amount?

Subsidies range from R38,911 to R169,265, depending on your monthly household income. The amount you could receive is calculated on a sliding scale – you can learn more on the FHF home page at the link above.


Nedbank can help you get FHF

If you qualify, Nedbank can help you get an FHF-subsidised home loan and also reward you with the following:

  • R5,000 cash back paid into your Nedbank transactional account, if you or your spouse meets our main-banked criteria and choose to switch your main bank account to Nedbank,

  • a 50% discount on the attorney bond registration fee, and

  • a home loan of up to 100% of the property purchase price

Subject to terms and conditions, these offers are available to successful home loan applicants with a gross monthly income of less than R32,000, so even if you earn above the FHF income range, you can still get a better deal on your first home loan if you choose the bank that’s best for your money.