HUMAN

SETTLEMENTS
Programmes and
Subsidies
INTRODUCTION
Government provides various housing programmes that are meant
to make sure that low or no income earners have homes. This is
consistent with the Chapter 2 of the Constitution - There shall be
houses security and comfort.

GOVERNMENT HUMAN SETTLEMENTS PROGRAMMES

These are all housing programmes in South Africa however some of

these are not offered in the Free State for different reasons.

NORMS AND STANDARDS FOR SUSTAINABLE

HOUSING DEVELOPMENT

The Minister of Housing with effect from 01 April 1999 introduced

the National Norms and Standards for construction of stand-alone
houses. All houses constructed through application of the National
Housing Programmes must at least comply with these norms and
standards. These National Norms and Standards should be in line
with the National Builders Regulations (NBR) and the house building
prescripts of the National Home Builders Registration Council
(NHBRC). All houses built by contractors must be enrolled with the
National Home Builders Registration Council (NHBRC) so that the five
year warranty against structural failure of the house will apply.

Sanitation, storm water drainage and water are a must.

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PROGRAMMES
INTEGRATED RESIDENTIAL
DEVELOPMENT PROGRAMME
The Integrated Residential Development Programme (IRDP) replaced
the Project Linked Subsidy Programme (PLSP). The programme
provides for planning and development of integrated housing
projects. Projects can be planned and developed in phases and
provides for holistic development orientation.

Phase 1: Land, Services and Township Proclamation

The first phase entails planning, land acquisition, township

establishment and the provision of serviced residential and other
land use stands to ensure a sustainable integrated community.

Phase 2: Housing Construction: Individual Ownership

Options

The second phase comprises the house construction phase for

qualifying housing subsidy beneficiaries and the sale of stands to
non-qualifying beneficiaries and to commercial interests etc.

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INDIVIDUAL SUBSIDY
This programme provides access to state assistance where qualifying
households wish to acquire an existing house or a vacant serviced
residential stand, linked to a house construction contract through an
approved mortgage loan. These properties are available in the
normal secondary housing market or have been developed, as part
of projects not financed through one of the National Housing
Programmes.

These subsidies are available to individual beneficiaries who wish to

buy an existing house or a stand, linked to a house building contract
in the market. These subsidies are available on a first come first serve
basis and may be credit linked or non-credit linked.

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 INFORMAL SETTLEMENTS UPGRADING
PROGRAMME
The programme facilitates the structured upgrading of informal
settlements. It applies to in situ upgrading of informal settlements as
well as where communities are to be relocated for a variety of
reasons. The programme entails extensive community consultation
and participation, provision of emergency basic services, permanent
services and security of tenure.

Silahliwe Informal Settlement in Bethlehem Volgelfontein Integrated Human Settlements Development near
Bethlehem

PROJECTS
 Caleb Motshabi, Bloemfontein, started with services on 7552
sites
 Thandanani, Welkom, 1956 housing project

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RURAL SUBSIDY: COMMUNAL LAND
RIGHTS
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This subsidy is available to beneficiaries who only enjoy functional
tenure rights to the land they occupy. This land is normally in rural
areas and belongs to the state and is governed by traditional
authorities.

The subsidies are only available on a project basis and beneficiaries

are supported by implementing agents. Beneficiaries also have the
right to decide how to use their subsidies either for service provision,
on building of houses or a combination thereof.

Diyatalwa in Harrismith Maqhekung in Qwa-qwa

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FARM RESIDENTS HOUSING ASSISTANCE
PROGRAMME
This housing assistance programme provides capital subsidies for the
development of engineering services where no other funding is
available and adequate houses for farm workers and occupiers in a
variety of development scenarios. The programme attempts to
address the wide variety of housing needs of people working and
residing on farms by providing a flexible package of housing models
to suit the local context.

The programme will be applied where the farm residents are

required to reside close to their employment obligations and where
the farm land is distant from the nearest town, rendering the
settlements of the farm residents in the town impracticable.

Welheminah Agri-village houses in Ficksburg

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INSTITUTIONAL SUBSIDY
Institutional Housing Subsidies are available to Housing Institutions
that provide tenure arrangements alternative to immediate
ownership (such as rental, instalment sale, share block or co-
operative tenure) to subsidy beneficiaries. The subsidy enables
Housing Institutions to undertake approved projects and to enable
them to create affordable housing stock for beneficiaries to live in
subsidised residential properties.

The rental unit may not be transferred to the beneficiary within the
first four years of occupation. A further condition is that the legal
entity must, in addition to the subsidy, make its own capital
investment in the property.

 BOKAHOSANE BA BANA HOME

Bokahosane ba Bana is a home for abused and abandoned children.
The house is situated in Gelukwarts, Kroonstad and is run on a
voluntary basis.

The home operated from a private home until the department

provided a subsidy for construction of a better, bigger and more
comfortable home that would house all the children in a homely and
nurturing environment.

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  MPHATLALATSANE HOME FOR
SPECIAL NEEDS
Mphatlalatsane Home for the Severely Intellectually Handicapped
individuals based in Viljoenskroon provides care, education,
sheltered employment and accommodation to mentally challenged
children and “school leavers” who are enrolled at the school.

The Free State Provincial Government provided 50 Institutional

Subsidies for construction of Communal Housing Units that would
house Severely Intellectually Handicapped “school leavers” and their
supervisors.

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 SOCIAL HOUSING PROGRAMME
There is an increasing need for affordable rental units which provide
secure tenure to households which prefer the mobility provided by
rental accommodation. Social housing provides good quality rental
accommodation for the upper end of the low-income market
(R 1 500 – R 7 500), with the primary objective of urban
restructuring, creating sustainable human settlements.

The programme provides for grant funding to establish, capacitate

and capitalize social housing institutions which may develop, hold
and administer affordable rental units within identified restructuring
zones.

Brandwag Social Housing in Bloemfontein, Free State. These are rented out to individuals who are low-income earners.

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 PUBLIC SECTOR HOSTELS
REDEVELOPMENT PROGRAMME -
COMMUNITY RESIDENTIAL UNITS (CRU)
The Community Residential Units Programme (CRU) aims to facilitate
the provision of secure, stable rental tenure for lower-income
persons or households earning below R 3 500 per month who, as a result
of affordability, are unable to be accommodated in the formal private
rental market or the social housing market. The programme provides a
coherent framework for dealing with many different forms of public
sector residential accommodation.

Government provides grant funding for redevelopment of these

hostels to establish low cost rental accommodation for families and
single persons. The grants are for municipalities and or Provincial
Governments who own the units.

Zamdela Community Residential Units (CRU) in Sasolburg, Free State.

Masimong Community Residential Units (CRU) in Welkom Merriespruit Community Residential Units (CRU) in Virginia

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 FINANCE LINKED INDIVIDUAL SUBSIDY
PROGRAMME (FLISP)
Finance Linked Individual Subsidy Programme (FLISP) is one of the
elements of government’s broader strategy to improve the property
markets by facilitating the increased supply of affordable housing
finance. Finance Linked Individual Subsidy Programme (FLISP) is
therefore expected to unlock increased access to mortgage finance
as well as stimulate the supply of housing stock in the target market.

It specifically addresses the housing needs of the affordable market,

also known as the GAP market. These are households whose income
is not enough to qualify for a home loan, but exceed the maximum
limit set for the ‘free basic house’ subsidy scheme intended for the
‘poor’.

The GAP market income is between R 3 501 and R 15 000 per month.
Practically, Finance Linked Individual Subsidy Programme (FLISP)
allows qualifying beneficiaries to reduce the initial mortgage loan
amount or increase the shortfall between the qualifying loan and the
total house price, bringing the home loan installment to an
affordable amount, over the loan repayment period. Through the
FLISP subsidy, first time home-ownership opportunities are
increased.

Vrede houses Heilbron houses with solar geysers Northleigh houses could be purchased
through FLISP

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Finance Linked Individual Subsidy Programme (FLISP) by definition is
a ‘finance-linked’ subsidy, therefore for consideration, applicants
must produce an approval in principle’ indicating the approved home
loan amount. In ensuring the subsidy helps deserving households, a
set of criteria must be met to qualify, including the applicant must
be:

 A first time home buyer earning between R 3 051 to R 15 000

per month
 South African citizen or Permanent Resident with valid identity
document
 Over 18 years old and competent to legally contract
 Never have benefitted from a Government Housing Subsidy
Scheme before
 Have an Approval in Principle of home loan from an accredited
South African Financial Institution.
 FLISP is for residential properties in formal towns where
transfer of ownership and registration of mortgage bond is
recordable in the Deeds Office.

Depending on the gross household monthly income, the once-off

FLISP subsidy amount may, vary between R 10 000 and R 87 000. The
subsidy may be used for purposes of acquiring residential property
valued at R 300 000 or less.

The property has to be in a locality where transfer of ownership and

registration of mortgage bond is recordable in the Deeds Office.

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Important Documents
The following CERTIFIED COPIES are required as supporting
documents when applying for Finance Linked Individual Subsidy
Programme (FLISP):-

• RSA Bar Coded Identity Document (ID)

• Bar Coded Permanent Residence Permit (where applicable)
• Birth Certificates/ RSA IDs of all financial dependents (where
applicable)
• Proof of Foster Children Guardianship (where applicable)
• *Marriage Certificate, Civil Union Certificate or Cohabiting
Affidavit or Proof of Partnership (applicable)
• *Divorce Certificate (where applicable)
• *Spouse's Death Certificate (where applicable)
• Proof of Monthly Income
• Home Loan Approval in Principle/ Grant Letter from an
accredited Lender/ Bank
• Agreement of Sale for the residential property
• Building Contract and Approved Building Plan (where
applicable)
• Affidavits required for informal marriages solemnised under
the SA Civil Law, accompanied by sworn statements to prove
the authenticity of the relationship

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Accessing FLISP
A qualifying FLISP applicant mas source new or old property with the help
of a registered Estate Agent or find property from the FLISP accredited
projects with the help of the developers. These Property Practitioners may
also help the applicant apply for the FLISP subsidy, once housing finance
has been secured with the bank.

An illustrative example of how FLISP supports households to acquire

property is shown below:
EXAMPLE 1 is based on the R 9 000 monthly income-band, where the individual after
the Lender / Bank’s credit and affordability assessment, based on the National credit
Act (NCA) criteria, qualified for the R 300 000 home loan:
FLISP reduces the mortgage loan amount to render the monthly loan repayment
instalments affordable.
(Payment made into the home loan account)
Property price R 300 000
Bank home loan approval R 300 000
Less FLISP as a deposit R 50 000
Property price R 300 000
EXAMPLE 2 is based on the R 9 000 monthly income-band, where the individual after
the Lender / Bank’s credit and affordability assessment, based on the National credit
Act (NCA) criteria, qualified for the R 250 000 home loan:
FLISP reduces the mortgage loan amount to render the monthly loan repayment
instalments affordable.
(Payment made into the home loan account)
Property price R 300 000
Bank home loan approval R 250 000
Less FLISP as a deposit R 50 000
Property price R 250 000

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All Provincial Governments are actively prioritising the Finance Linked
Individual Subsidy Programme (FLISP) to facilitate first-time home
ownership opportunities to the GAP market. Measured and well-prepared
roll-out of Government’s Housing Subsidy Programmes like Finance
Linked Individual Subsidy Programme (FLISP) affords immediate
provincial constituents accelerated housing opportunities and
improvement to the property market that contributes positively to the
economy.

For more information contact the FLISP office on:

12th Floor, Room No: 1215

O.R Tambo Building
Bloemfontein

MS DINEO POONE MR TSHENOLO MOLATEDI

Tel: 051 405 4400 Tel: 051 403 3311
Email: dineo@fshs.gov.za Email: tshenolo@fshs.gov.za

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MILITARY VETERANS PROGRAMME

In partnership between the National departments of Defense and

Military Veterans, Human Settlements and South African National
Military Veterans Association for the construction of Military
Veterans Housing units. The construction of these housing units is
for those Military Veterans who were involved in both sides of the
South African liberation war, statutory and non-statutory armed
forces, from 1960 – 1994.

Similarly to houses for restitution beneficiaries, these houses are bigger as

they have an additional subsidy consisting of the following: 3 bedroom
tiled house with main bedroom en suite (shower, toilet and basin); open
plan; wall wardrobes; built-in kitchen units; carport; paved drive way;
fenced; aluminum window frames, sans x10400 and is a 100m2 house.

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PEOPLE’S HOUSING PROCESS (PHP)
This subsidy is given to people who want to build or manage the
building of their own homes. Unlike the Project Linked Subsidy
where a contractor builds houses for a number of people, the
Peoples Housing Process allows people or beneficiaries to build or
organise the building of their homes. People are in charge of their
own house construction process in this programme and are
supported by a support organisation. Additional funds are available
to pay for the support functions.

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ENHANCED PEOPLE’S HOUSING PROCESS

The Enhanced People’s Housing Process (EPHP) aims to support
household who wish to enhance their housing subsidies by building
their own homes. The enhanced people’s Housing process can be
accessed through the Integrated Residential Development
Programme (IRDP), Project Linked Consolidation, Institutional or
Rural Subsidies as well as technical and other forms of assistance in
the house building process.

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SUBSIDY VARIATION FOR
EXTRAORDINARY DEVELOPMENT
CONDITIONS AND DISABLED PEOPLE
In order to ensure that housing units are delivered through the
National Housing Scheme (NHS), they are adjusted to accommodate
the special housing needs of a disabled beneficiary (or a member of
the beneficiary household) to enable them to live independently,
certain additions/ alterations are necessary.

The developer will therefore submit an application for the

adjustment of the subsidy amount for extraordinary development
conditions on the applicable form with all relevant information (e.g.
proof of disabilities) to enable the decision-making authority to
evaluate the application. The Member of the Executive Council
(MEC) may require additional information before the final decision
can be conveyed to the Developer.

Government cares for people with disabilities. Thus, those who

qualify for a housing subsidy will receive additional amounts to
improve their houses with special additions such as paving and
ramps to the outside doors, grab rails in bathrooms, kick plates on
doors and visible door bells for the deaf.

House built in Frankfort with additional wheelchair ramps.

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LIMITATION ON THE SALE OF RDP/ BNG
HOUSES (PRE-EMPTIVE CLAUSE)
It is illegal for the recipient of a subsidy house, now referred to as
BNG house, to sell the house before they have lived in it for a
minimum period of eight (8) years. Yet, experience shows that in
many instances the houses are used to make quick money by
unscrupulous individuals who sell them within the 8 year period.
Alternatively recipients rent out the houses to be used as business
premises, while the beneficiaries return to live in informal
settlements.

While the minimum occupancy period may be adjusted from time to

time, the current limitation is 8 years and, within this period a
beneficiary may only re-sell the property back to the relevant
Provincial Human Settlements Department. This type of Voluntary
sale occurs when a beneficiary, for whatever reasons, chooses not
keep the subsidy house.

In instances of Involuntary sales the findings are that creditors sell

the properties at a price which covers the debt owed and, not at a
price that reflects the full value of the property – which is usually
greater. Subsequent buyers of the properties are mostly persons
who would not qualify for state housing subsidies.

Thus, government is aware of this on-going illegal sale of

government subsidised houses and, is taking steps to enforce the 8
year pre-emptive clause.

The pre-emptive clause is contained in Sections 10A and 10B of the

Housing Act, 107 of 1997, and, limits both the voluntary and
involuntary sales of houses obtained by persons via any of the
national housing programmes.

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The pre-emptive clause was introduced into law by means of the
Housing Amendment Act 4 of 2001, which came into operation on
February 1, 2002. The intended outcome of this legislation was to
put an end to the illegal sale of RDP/BNG houses by beneficiaries
who exacerbate the housing backlog by selling houses at a price
below the market value, then returning to live in informal
settlements.

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Qualification Criteria
Who Qualifies?

To qualify you must:

 Be a South African citizen

 Be contractually capable
 Be married or habitually cohabit with a partner
 Be single and have financial dependents
 Earn less than R 3 500 per month per household
 Be a first-time government subsidy recipient
 Be a first time home owner
 Single Military Veterans without financial dependents
 Single aged persons without financial dependents

ESSENTIAL DOCUMENTS
Applicants are required to produce the following documents:

• Applicant and spouse’s identity documents for married couples

or partners
• Birth certificates of children
• Proof of income if working. (Salary Slip)

Where to apply for Housing Subsidy?

• Provincial Department of Human Settlements
• Local Municipality

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Contact details

Help Desk: 051 403 3379 / 051 403 3392

FLISP Office: 051 405 4400 / 051 403 3311
Fraud and Corruption: 0800 701 701 / 0800 146 873
Presidential Hotline: 17737
Website: www.humansettlements.fs.gov.za

Physical Address
O.R Tambo House
c/n Markgraaff and ST. Andrew streets
Bloemfontein
9301

Postal Address
P.O Box 211
Bloemfontein
9300

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Acronyms
Free State Department of Human Settlements

BNG Breaking New Ground

CRU Community Residential Units
EPHP Enhanced People’s Housing Process
FLISP Financed Linked Subsidy Programme
HSS Housing Subsidy System
IRDP Integrated Residential Development Programme
MEC Member of the Executive Council
NBR National Builders Regulations
NHBRC National Home Builders Registration Council

PHP People’s Housing Process

PLSP Project Linked Subsidy Programme

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FREE STATE DEPARTMENT OF HUMAN SETTLEMENTS
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FREE STATE DEPARTMENT OF HUMAN SETTLEMENTS
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