Eligibility Expanded for Home Guarantee Scheme
The Federal Government has officially announced a set of changes to the Home Guarantee Scheme, as part of the 2023-24 Budget, that will allow more homebuyers to enter the housing market with a low deposit.
The Home Guarantee Scheme incorporates the First Home Guarantee, the Regional First Home Buyer Guarantee and the Family Home Guarantee. Under the Scheme, the Federal Government effectively acts as a guarantor for the home loan of eligible participants, allowing purchasers to buy a new or existing home with a deposit of 5% without having to pay Lenders Mortgage Insurance. The remaining 15% of the deposit is guaranteed by the government. Under the Family Home Guarantee, the deposit required is only 2% with the government acting as guarantor for the remaining 18% - significantly reducing the amount families are required to save before purchasing a home.
The scheme is subject to a variety of terms and conditions, including strict eligibility criteria, and limited to a set number of places (35,000) each year.
Eligibility Expanded
In an attempt to address the current housing affordability crisis in Australia, the government has confirmed that the eligibility criteria for the First Home Guarantee, Regional First Home Guarantee and Family Home Guarantee will be expanded to reflect the changing make-up of Australian households.
We will now see a change to the definition of a 'couple' to simply being any two eligible participants rather than a married couple or de facto relationship. In addition, each of the Guarantees have now been opened up to permanent residents whereas before, at least one of the purchasers had to be an Australian citizen.
The major changes to eligibility include:
- Non-first home owners, who haven't owned a property for ten years, can now access the schemes which will be beneficial to people who have fallen out of home ownership due to financial issues or relationship breakdowns.
- For the First Home Guarantee and Regional First Home Guarantee, joint applications for friends, siblings, and other family members will be allowed starting from July 2023.
- Single legal guardians of children, including aunts, uncles and grandparents, will also be eligible to access the Family Home Guarantee as well as parents.
For more information on the Scheme please visit https://www.nhfic.gov.au/support-buy-home.
Applications for the scheme can only be made through one of the participating brokers or lenders – click here for a list of the financial institutions involved – and you should contact your lender for more information in the first instance. To find out whether you may be eligible to apply for assistance through the Home Guarantee Scheme, you can check your eligibility on the Government’s National Housing Finance and Investment Corporation (NHFIC) eligibility checker.
Buying a Property?
If you are looking to purchase a property, speak to the experienced team at CDQ Solicitors on ph: 02 8566 2400. We can guide you through the transaction, whether you are purchasing as part of the Home Guarantee Scheme or not, and ensure the process runs as smoothly as possible.
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