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Government Support For 1st Home Buyers

By July 12, 2024July 31st, 2024No Comments

The Australian Government’s Home Guarantee Scheme supports eligible home buyers to buy a home sooner.

Help to Buy

 In November 2023, the Federal Government introduced legislation into the Commonwealth Parliament to establish the Help to Buy Program that will be administered by Housing Australia. The Program has not commenced.
The Home Guarantee Scheme (HGS)
The Home Guarantee Scheme (HGS) is an Australian Government initiative to support eligible home buyers to buy a home sooner. The Scheme is administered by Housing Australia on behalf of the Australian Government.The Scheme includes three types of Guarantees:
  • First Home Guarantee (FHBG) – supporting eligible home buyers to buy a home sooner, with a deposit as little as 5%. For FY2024-25, 35,000 places are available.
  • Regional First Home Buyer Guarantee (RFHBG) – supporting eligible regional home buyers to buy a home sooner, in a regional area, with a deposit as little as 5%. For FY2024-25, 10,000 places are available.
  • Family Home Guarantee (FHG) – supporting eligible single parents and eligible single legal guardians of at least one dependent to buy a home sooner, with a deposit as little as 2%. For FY2024-25, 5,000 places are available.
The New Home Guarantee (NHG) is no longer available. A NHG place reserved on, or before 30 June 2022, will still be able to progress to settlement, subject to meeting eligibility criteria and NHG requirements and timelines.

Please note the relevant Notice of Assessment (NOA) that your lender will require to validate your eligibility for a HGS Guarantee. For reservation for a Scheme Place made by a Participating Lender on or before 30 June 2024, the 2022-23 NOA will be required. A Guarantee can be issued (and settlement occur after this date, subject to all other criteria being met).

For reservations for a Scheme Place made by a Participating Lender on or after 1 July 2024, the 2023-24 NOA will be required. A Participating Lender can provide a 90 day expiry period whilst the NOA is being obtained however will be required prior to any Guarantee being issued and settlement occurring.
How the HGS works
Housing Australia works with Participating Lenders to facilitate loans to eligible home buyers who meet income eligibility thresholds and other eligibility criteria and don’t have the 20% deposit typically required for a home loan.
Eligible home buyers can apply for a loan through a Participating Lender who has been authorised by Housing Australia to participate in the HGS.
Housing Australia provides a Guarantee to the Participating Lender of up to 15% of the value of a home loan under the First Home Guarantee or the Regional First Home Buyer Guarantee; and up to 18% under the Family Home Guarantee. This enables the home buyer to buy a home without paying Lenders Mortgage Insurance. The Guarantee is not a cash payment or a deposit for a home loan. Eligibility criteria apply.

Housing Australia has authorised a panel of Participating Lenders to offer the HGS.

Eligibility criteria

Home buyers must meet certain eligibility criteria for the HGS, and these differ slightly for each of the Guarantees.

Under the HGS, home buyers can buy a residential property, including:

  • an existing house, townhouse or apartment
  • a house and land package
  • land and a separate contract to build a home
  • an off-the-plan apartment or townhouse.
  • Use the Property Price Cap Tool to look up the property price caps for each location.

Specific timeframes and criteria apply to different property types. The contract of sale and (if applicable) eligible building contract may need to be executed by specific dates.

Contact a Participating Lender for more information, including the full list of property criteria.

How to apply
HGS applications can only be made with a Participating Lender or their authorised representative (a mortgage broker). Housing Australia does not accept HGS applications or provide personal financial advice.

Home buyers (and those advising them) should consider consulting a Participating Lender and seeking independent financial and legal advice about whether a particular home loan or property, and the terms of the HGS suit personal circumstances and objectives.

Before entering into a home loan agreement, home buyers should consider talking with their lender (or broker) about the potential implications of changing interest rates or house prices on individual circumstances.

Article source via: https://www.housingaustralia.gov.au/support-buy-home