Quick Facts

• First Home Finance subsidy: R30,001 to R169,264 available
• Income range for subsidy: R3,501 to R22,000 per month
• Minimum credit score needed: 600 to 650 for approval
• Transfer process takes: 8 to 12 weeks (sometimes 6 months)
• Properties under R1.1 million: No transfer duty required

Understanding First-Time Home Buying in South Africa

Buying your first home is a big step. You need to know about costs, requirements, and processes. Many South Africans can get help from the government to buy their first home.

The good news is that there is a subsidy available. It is called First Home Finance or FLISP. This helps people who earn between R3,501 and R22,000 per month. You can get money to help buy your first home.

In 2024 and 2025, interest rates have dropped. This means lower monthly payments for home loans. The prime rate is now 10.50%, down from 11.75% in 2024. This is good news for first-time buyers.

✅ First Home Finance Subsidy (FLISP)

First Home Finance is a government programme. It helps first-time home buyers who earn a medium to low income. You can get money to help buy your first home.

Who Can Qualify?

You must meet all these requirements:

• Be a South African citizen with valid ID
• Or be a permanent resident with valid permit
• Be over 18 years old
• Be married, living together, or single with dependents
• Earn between R3,501 and R22,000 per month (total household income)
• Never owned a home before
• Never received a government housing subsidy before
• Have home loan approval from a registered bank or lender

How Much Money Can You Get?

The subsidy amount depends on your total household income. Here is what you can get:

Monthly Household Income	Subsidy Amount
R3,501 to R7,000	Up to R130,505
R7,001 to R15,000	Between R87,000 and R110,000
R15,001 to R22,000	Between R30,001 and R87,000

What Can You Use the Subsidy For?

• Buy an existing house or apartment
• Buy vacant land that has water and electricity services
• Build a house on land you own (builder must be NHBRC registered)
• Use as deposit if you don’t have enough money
• Reduce your home loan amount to lower monthly payments

How to Apply for FLISP

Step 1: Get your home loan approved by a bank first. Banks like Absa, FNB, Standard Bank, Nedbank, or SA Home Loans can help you.

Step 2: Complete the home buyers education programme. This teaches you about owning a home.

Step 3: Apply for First Home Finance at your local Department of Human Settlements office. Or apply online at the First Home Finance portal. Or call NHFC on 010 085 2199.

Step 4: Wait about 7 days for your application to be processed.

Step 5: If approved, the money is paid to your attorney or home loan account when your bond is registered.

Documents You Need for FLISP

• Bar-coded ID or smart card ID for all adults
• Birth certificates for children without IDs
• Proof of South African citizenship or permanent residency permit
• Marriage certificate (if married)
• Recent payslip showing your income
• Bank statements (last 3 months)
• Home loan approval letter from your bank
• Proof of dependents (if single)

Basic Home Loan Requirements

To get a home loan in South Africa, you must meet these basic requirements:

Age and Citizenship

• Must be 18 years or older
• South African citizen or permanent resident

Employment and Income

• Permanently employed for at least 6 months
• Or self-employed for at least 2 years
• Stable income that can cover monthly payments
• Banks usually lend up to 30% of your monthly income

Documents Needed

• Certified copy of your ID
• Latest payslips (last 3 months)
• Bank statements (last 3 months)
• Proof of address (utility bill or lease agreement)
• Offer to purchase document for the property
• If self-employed: Financial statements and tax returns for 2 years

Deposit Requirements

Most banks want a deposit of 10% to 20% of the property price. This lowers your monthly payments and improves your chances of approval.

Some banks offer 100% home loans with no deposit. This is possible if you have excellent credit and stable income. Some banks even offer 110% loans to cover transfer costs.

Understanding Credit Scores for Home Loans

Your credit score is very important for home loan approval. It shows banks how well you manage debt and pay bills on time.

Credit Score Requirements

Credit Score Range	What It Means
Below 600	Difficult to get approval. Work on improving your score first.
600 to 650	Minimum for approval. You may get higher interest rates.
650 to 700	Good score. Better interest rates and approval chances.
700 and above	Excellent score. Best interest rates and loan terms.

How to Check Your Credit Score

You can check your credit score for free once per year from these credit bureaus:

• Experian: www.experian.co.za
• TransUnion: www.transunion.co.za
• Compuscan: www.compuscan.co.za
• XDS: www.xds.co.za

How to Improve Your Credit Score

• Pay all bills on time every month
• Pay more than the minimum payment on debts
• Keep credit card balances below 30% of limit
• Don’t apply for too many credit accounts at once
• Check your credit report for errors and dispute them
• Keep old accounts open to show longer credit history
• Reduce your total debt before applying for home loan

⚠️ All Costs Involved in Buying a Home

Buying a home costs more than just the property price. You must budget for extra costs. Plan to have about 10% of the property price for extra costs.

1. Deposit

Most banks want 10% to 20% of property price. Some banks offer 100% loans with no deposit needed.

Example: R500,000 home needs R50,000 to R100,000 deposit.

2. Transfer Costs

These are fees paid to the conveyancing attorney. The attorney transfers the property into your name.

Property Price	Approximate Transfer Cost
R500,000	R15,000 to R20,000
R1,000,000	R30,000 to R35,000
R2,000,000	R50,000 to R60,000

3. Bond Registration Costs

These are fees paid to register your home loan with the Deeds Office.

Bond Amount	Bond Registration Cost
R100,000 or less	R5,750 (includes VAT)
R500,000	R15,000 to R18,000
R1,000,000	R21,689 (includes VAT)
R2,000,000	R30,544 (includes VAT)

4. Transfer Duty

This is tax paid to SARS when you buy property. Good news for first-time buyers: Properties under R1,100,000 are exempt from transfer duty.

• Properties under R1.1 million: No transfer duty
• R1.1 million to R1.5 million: 3% on amount above R1.1 million
• R1.5 million to R2.25 million: 6% on amount above R1.5 million
• Above R2.25 million: 8% on amount above R2.25 million

5. Bank Initiation Fees

Banks charge about R6,000 to R7,000 to set up your home loan. This is usually added to your bond amount.

6. Rates and Taxes

You must pay 3 months of rates and taxes upfront. This is usually R1,500 to R3,000 depending on property value.

7. Monthly Home Loan Payments

With the current prime rate at 10.50%, here are approximate monthly payments:

Loan Amount	Monthly Payment (20 years)
R500,000	R5,100 per month
R750,000	R7,650 per month
R1,000,000	R10,200 per month

Step-by-Step Home Buying Process

Follow these steps to buy your first home in South Africa:

Step 1: Check Your Credit Score

Get your free credit report from a credit bureau. Make sure your score is at least 600. Fix any errors on your credit report. Improve your score if needed.

Step 2: Calculate What You Can Afford

Use a bond calculator to see what you can afford. Banks usually approve 30% of your income for housing. Remember to budget for extra costs and monthly expenses.

Step 3: Get Pre-Approved for Home Loan

Apply for pre-approval with a bank or use a bond originator. Bond originators like Ooba can apply to multiple banks for you. Pre-approval is valid for 90 days. This shows sellers you are serious.

Step 4: Find Your Home

Work with a registered estate agent. Check that agent has valid PPRA certificate. View properties in person. Never pay money before viewing property. Check the property carefully before making offer.

Step 5: Make an Offer to Purchase

Submit your written offer through the estate agent. Include conditions like “subject to bond approval”. Have a lawyer review the offer before signing. Both parties must sign for it to be binding.

Step 6: Apply for Final Home Loan Approval

Submit all required documents to the bank. Bank will do property valuation. Approval takes 5 to 10 working days. Once approved, bond attorney is appointed.

Step 7: Apply for First Home Finance Subsidy

If you qualify, apply for FLISP subsidy now. Complete home buyer education programme. Submit application with all documents. Processing takes about 7 days.

Step 8: Transfer Process

Transfer attorney prepares documents. You sign transfer documents and power of attorney. Pay transfer costs and rates to attorney. Documents are lodged at Deeds Office. Registration happens after 7 to 10 working days.

Step 9: Take Occupation

Receive keys on agreed occupation date. Do final inspection with estate agent. Set up utilities in your name. Arrange home insurance. Start making monthly bond payments.

🚨 CRITICAL SCAM WARNINGS

Property scams are increasing in South Africa. Fraudsters use AI technology, fake emails, and deepfake videos. You must be very careful. Here are the most common scams:

1. Fake Government Housing Subsidy Scams

How it works: Scammers send SMS or WhatsApp messages. They say you are approved for RDP house. They ask you to pay R50,000 to R100,000 registration fee.

The truth: First Home Finance and RDP houses are FREE. You never pay upfront fees. No payment is needed to apply for government housing subsidies.

2. Email Interception Fraud

How it works: Fraudsters intercept emails between you and attorney. They send fake email with different bank details. Email looks almost identical to real attorney’s email. You pay your deposit into wrong account.

How to protect yourself: Always phone attorney directly to confirm bank details. Never trust email bank details without calling. Use the phone number from attorney’s official letterhead.

3. Fake Property Listings

How it works: Scammers create fake property listings online. They use stolen photos from real properties. They offer very low prices to attract buyers. They refuse to meet in person. They ask for deposit before viewing.

How to protect yourself: Always view property in person. Meet the estate agent or owner face to face. Check agent’s PPRA registration certificate. Never pay any money before viewing property.

4. Fake Estate Agents

How it works: Criminals pose as estate agents. They use fake ID and stolen agency branding. They show properties they don’t own. They take deposits and disappear.

How to protect yourself: Check agent registration at PPRA website (www.ppra.org.za). Ask to see valid Fidelity Fund Certificate. Never pay money directly to estate agent. All money goes to attorney’s trust account.

5. AI and Deepfake Scams (NEW in 2024/2025)

How it works: Scammers use AI to create fake property documents. They clone voices of attorneys or estate agents. They create deepfake videos showing fake property tours. They forge official letterheads and signatures.

How to protect yourself: Always verify in person or through official channels. If something seems too good to be true, it probably is. Video calls can be faked, insist on in-person meetings.

Red Flags to Watch For

• Request for upfront payment before viewing property
• Price is much lower than similar properties
• Seller or agent refuses to meet in person
• Email address looks similar but has small differences
• Urgent pressure to pay immediately
• No official letterhead on documents
• Spelling mistakes in official emails
• Payment to personal account instead of trust account
• Agent cannot show valid PPRA certificate
• Property owner claims to be overseas or unavailable

What to Do If You Are Scammed

If you lose money to a property scam:

• Report to SAPS immediately (call 10111)
• Contact your bank’s fraud department immediately
• Report to SABRIC (South African Banking Risk Centre)
• Report to PPRA if fake estate agent involved
• Get legal advice from attorney
• Warn others on social media to prevent more victims

Important Contact Numbers

Organisation	Contact Details
National Housing Finance Corporation (NHFC) For First Home Finance applications	Phone: 010 085 2199 Website: www.nhfc.co.za
Department of Human Settlements For housing subsidies and RDP information	Phone: 0800 146 873 Email: info@dhs.gov.za
Property Practitioners Regulatory Authority (PPRA) To check estate agent registration	Website: www.ppra.org.za
National Credit Regulator (NCR) For credit and home loan complaints	Phone: 0860 627 627 Website: www.ncr.org.za
Financial Sector Conduct Authority (FSCA) For financial services complaints	Phone: 0800 110 443 Website: www.fsca.co.za
SABRIC To report banking fraud and scams	Phone: 0860 123 000 Website: www.sabric.co.za
South African Police Service (SAPS) To report fraud and scams	Emergency: 10111 Fraud hotline: 0860 010 111

Before You Start

Check your credit score at least 6 months before buying. This gives you time to fix problems and improve your score. Aim for a score above 650 for better interest rates.

Use the First Home Finance Subsidy

If you earn between R3,501 and R22,000 per month, apply for FLISP. This can give you up to R169,264 towards your first home. It can be used as a deposit or to reduce your loan amount. Remember, you can only use this subsidy once in your life.

Budget for All Costs

Save at least 10% to 15% of the property price for extra costs. This includes deposit, transfer costs, bond registration, and upfront rates. Don’t forget to budget for monthly bond payments, rates, insurance, and maintenance.

Protect Yourself from Scams

Remember: No legitimate financial service charges upfront fees. Always verify bank details by phone before making payments. Never pay money to personal accounts. All property payments go to attorney trust accounts. Check estate agent registration with PPRA. If a deal seems too good to be true, it is a scam.

Work with Professionals

Use registered estate agents with valid PPRA certificates. Consider using a bond originator to compare home loans from multiple banks. They can help you get the best interest rate. Have a lawyer review all documents before signing. Don’t rush into any decision.

Take Your Time

Buying a home is the biggest financial decision most people make. Don’t let anyone pressure you to rush. Take time to view properties properly. Read all documents carefully. Ask questions about anything you don’t understand. It’s better to wait and get it right than rush and make mistakes.