For many South Africans, the dream of owning a first home feels just out of reach. To help bridge the gap, government introduced First Home Finance (formerly known as FLISP) - a subsidy designed to support qualifying first-time buyers.

But while the subsidy can provide meaningful financial relief, it’s equally important to understand the eligibility criteria, restrictions on the title deed, and the realities around timelines before you start counting on the funds.

Who Qualifies?

To be considered for First Home Finance, you must:

• Be a South African citizen or permanent resident, over 18, and legally able to contract;

• Be a first-time buyer (never owned a residential property before);

• Not have benefited from another housing subsidy;

• Earn a combined household income between R3,501 and R22,000 per month;

• Apply jointly with your spouse or partner if married or cohabiting;

• If single, prove you have at least one financial dependent; and

• Hold an Approval in Principle (AIP) for a home loan or another recognised form of housing finance.

What Can It Be Used For?

The subsidy amount varies depending on income level and can be applied to:

• A deposit towards the purchase price;

• Transfer and bond registration costs; or

• Reducing the loan amount to ease monthly repayments.

Restrictions on the Title Deed

Applicants should also be aware of legal restrictions that accompany the subsidy:

• Eight-Year Resale Restriction
  In many provinces, you may not sell the property within the first eight years. If you do, you must first offer the property back to the Department of Human Settlements.

• Formal Title Required
  The property must have a valid, registered title deed. Informal land or unregistered plots will not qualify.

• Building Compliance
  Where the subsidy is used for a new build, all plans must be approved, and construction must comply with NHBRC and municipal requirements.

Timelines: What You Need to Know

This is often where buyers are caught off guard.

• Applications are not processed by Phoenix Bonds. They are submitted directly to the National Housing Finance Corporation (NHFC) or the provincial Department of Human Settlements.

• Delays are common. Approvals and payouts can take many months, depending on provincial backlogs.

• Funds are often paid late. Even once approved, the subsidy is usually paid well after the property transfer and bond registration have already taken place.

The key takeaway? Don’t structure your purchase on the assumption that the subsidy will be available immediately. Instead, treat it as a future benefit that can ease your financial position once it pays out.

Phoenix Bonds’ Role

Our focus is on securing your home loan approval and guiding you through the finance process with the banks. We do not submit First Home Finance applications on behalf of clients.

However, we will:

• Assess whether you meet the qualifying criteria;

• Explain how the subsidy may impact your affordability; and

• Ensure your home loan is structured correctly so that the subsidy - if and when it pays out - adds value without creating unnecessary delays or risks in your purchase.

Conclusion

First Home Finance is a valuable tool for first-time buyers, but it comes with eligibility requirements, legal restrictions, and lengthy timelines.

At Phoenix Bonds, we help buyers understand these realities from the outset, so you go into your first property purchase with clear expectations and a home loan structured for long-term success.