First Home Buyers Grants
What is the First Home Loan Deposit Scheme?
The First Home Loan Deposit Scheme is an initiative from the Australian Government designed to support eligible first home buyers purchase a home sooner.
NHFIC provides a guarantee for eligible first home buyers on low and middle incomes so that they can purchase a home with a deposit of as little as 5%.
The Scheme supports up to 10,000 home loans each financial year through a panel of participating lenders.
How Will This Benefit You?
Generally if you want to buy a property in Australia you will need a deposit of at least 20 per cent to avoid paying Lenders Mortgage Insurance. The Loan to Valuation Ratio needs to be below 80 per cent to avoid paying LMI. The Loan to Valuation Ratio (LVR) takes into the account the purchase price of the property including stamp duty and legal costs less the deposit been placed on the property.
Under the First Home Loan Deposit Scheme, you’re required to contribute a minimum deposit of 5 per cent and the NHFIC (The National Housing and Finance Investment Corporation) contribute up to 15 per cent of the property’s value.
Are You Eligible For The First Home Loan Deposit Scheme?
Australian citizens who are at least 18 years of age. Permanent residents are not eligible.
- Single applicants with a taxable income of up to $125,000 per annum for the previous financial year and couples with a taxable income of up to $200,000 per annum for the previous financial year.
- For all FHLDS applications made from 1 July 2021 to 30 June 2022, the relevant financial year assessed will be 2020-21.
- Couples are only eligible for FHLDS if they are married or in a de-facto relationship with each other. Other persons buying together, including siblings, parent/child or friends, are not eligible for the Scheme.
- FHLDS assists single (individual) applicants and couples (together) who have at least 5 per cent of the value of an eligible property saved as a deposit. If 20 per cent or more is saved, then the home loan will not be covered by the Scheme.
- Loans under FHLDS require scheduled repayments of the principal and interest of the loan for the full period of the agreement (with limited exceptions for interest-only loans, which mainly relate to construction lending).
- Applicants must intend to be owner-occupiers of the purchased property. Investment properties are not supported by FHLDS.
- Applicants must be first home buyers who have not previously owned, or had an interest in, a property in Australia, either separately or jointly with someone else (this includes residential strata and company title properties).
Family Home Guarantee
As part of the 2021-2022 Federal Government Budget, The Australian Government has announced the Family Home Guarantee, specifically designed to support eligible single parents purchase their first home or re-enter the property market with a deposit of at least 2 per cent.
Beginning in the 2021-2022 financial year there will be 10,000 places available through a panel of participating lenders.
Family Home Guarantee Eligibility
- Australian citizens who are at least 18 years of age. Permanent residents are not eligible.
- Must be a single parent with at least one dependent child. A parent is not a single parent if they are married or in a de facto relationship. NB: a person who is separated but not divorced is not single.
- The single parent must have a taxable income that does not exceed $125,000 per annum for the previous financial year. NB: Child support payments are not included as income for the purpose of the income cap.
- The single parent must be the only name listed on the loan and the certificate of title.
It is expected that the single parent demonstrate that they are the natural or adoptive parent of a dependent child within the meaning of s.5 of the Social Security Act 1991 (Cth). In a general sense, this means that the person must show that they are legally responsible (whether alone or jointly with another person) for the day-to-day care, welfare and development of the dependent child and the dependent child is in their care. - Alternatively, the single parent must show that they are the natural or adoptive parent of a child between 16 and 22 years of age, who receives a disability support pension and lives with them.
- Individuals must have at least 2 per cent of the value of the property available as a deposit. If the borrower has a deposit of more than 20 per cent, then the home loan cannot be covered by the Family Home Guarantee.
- Loans under the Family Home Guarantee require scheduled repayments of the principal and interest of the loan for the full period of the agreement. The loan agreement must have a term of no more than 30 years.
- Applicants must intend to be owner-occupiers of the purchased property. In the case of an active Australian Defence Force member applicant, the guarantee is not subject to the owner-occupier requirement after entering into the loan if they cannot meet this requirement because of their duties.
- Applicants can be either first home buyers or previous owners who do not currently own a home. That is, the applicant must not currently have a freehold interest in real property in Australia, a lease of land in Australia.
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