First Home Buyer - Government Assistance

Being a first home buyer, it can be difficult to break into the housing market. It can take a long time to save up your house deposit and can feel like you aren’t getting anywhere as house prices continue to increase.

Luckily the Federal Government have a few initiatives which can provide you help with getting into your first home sooner. Please note, with all these released initiatives, they are constantly changing and some of these schemes have limited availability and have some conditions which you may or may not be eligible for so it is great to talk to a trusted mortgage broker to help guide you through how these government incentives could help you.

The most popular of the government initiatives are the first home loan deposit scheme, the single parent’s scheme, new home guarantee.

The examples below are based on Melbourne and Geelong areas and are subject to change.

The First Home Loan Deposit Scheme (FHLDS) & New Home Guarantee

The First Home Loan Deposit Scheme is an Australian Government initiative to support eligible first home buyers purchase their first home sooner.

There were 10,000 First Home Loan Deposit Scheme places available to eligible first home buyers from 1 July 2021 to 30 June 2022. These have been exhausted for the time being, but 35,000 more allocations will become available as of 1st July 2022. Always check with your broker to see how many are available right now.

Usually, first home buyers with less than a 20% deposit need to pay lenders mortgage insurance.

Under this Scheme, part of an eligible first home buyer’s home loan from a Participating Lender will be guaranteed by National Housing Infrastructure Facility (NHFIC). This is aimed at enabling you to purchase your first home sooner with as little as a 5% deposit and waive the lenders mortgage insurance.

To qualify, all applicants must be buying their first home with the intention to live in. for single applicants’ income cannot be above $125,000 and for joint applicants income cannot be above $200,000. There are also capped purchase prices depending on location. For example, from 1st July 2022 a maximum eligible purchase price in Melbourne or Geelong (capital city and regional centres) would be $800,000. For other regions contact your trusted mortgage broker.

The only difference between the FHLDS and New home guarantee are that the new home guarantee is for off the plan, house and land packages and newly constructed dwellings where no one has previously lived in.

For more information on these schemes please visit the link below.

https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home/first-home-loan-deposit-scheme/

https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home/new-home-guarantee/

Family Home Guarantee (for single parents)

The Family Home Guarantee aims to support eligible single parents with at least one dependent child in purchasing a family home, regardless of whether that single parent is a first home buyer or a previous homeowner.

10,000 Family Home Guarantees were made available over four financial years from 1 July 2021 to 30 June 2025.

Usually, home buyers with less than a 20% deposit need to pay lenders mortgage insurance.

Under this Scheme, part of an eligible home buyer’s home loan from a Participating Lender will be guaranteed by NHFIC. This is aimed at enabling you to purchase your first home sooner with as little as a 2% deposit.

Any guarantee of your home loan is for up to a maximum amount of 18% of the value of your property (as assessed by your lender). This guarantee is not a cash payment or a deposit for your home loan.

For more information on this scheme please visit the link below.

https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home/family-home-guarantee/

If your home loan is covered by the above listed Schemes, you can also access other government programs – like the Australian Government’s First Home Super Saver Scheme, Home Builder Grant or First Homeowner Grant and concessions that may be offered by State and Territory governments. These other programs apply their own criteria and conditions, and you should make your own enquiries on their terms.

References

https://www.legislation.gov.au/Details/F2022L00585

https://www.nhfic.gov.au/