Good news for house hunters!
New price caps have been introduced for the First Home Loan Deposit Scheme and the Family Home Guarantee. Over the past year, house prices across the country have been rising and getting into the market has been difficult for many. In light of these factors, the Australian Government has released amended price caps for their first time buyer schemes that will come into effect as of 1 July 2021. This is welcome news for any first-time buyers who are struggling to save for a deposit and will mean more buyers are able to enter the market and secure a home.
New price caps
For most areas across the country, the First Home Loan Despot Scheme (FHLDS) will see a cap increase of $100,000 on property prices. Some areas are receiving increases in excess of $100,000 – such as greater New South Wales, greater Victoria, Brisbane and regional centres in Queensland, and the Northern Territory. Meanwhile, greater Queensland is receiving an increase of $50,000 and the Australian Capital Territory’s cap is unchanged, at $500,000. You can find a full list of the price cap changes on the National Housing Finance and Investment Corporation website.
In the 2020-21 Federal Budget, the government also announced an additional 10,000 places in the First Home Loan Deposit Scheme – these additional places are known as the New Home Guarantee. In total, the government has added 30,000 places to eligible applicants under the First Home Loan Deposit Scheme, the New Home Guarantee program, and the Family Home Guarantee.
In a recent media release, Assistant Treasurer and Minister for Housing, Michael Sukkar said, “We know how difficult it can be to buy a new home or re-enter the housing market, and that saving a deposit is the hardest part of getting into home ownership.” He went on to praise these initiatives as they work to help first home buyers and single parent families achieve “the Australian dream of owning your own home.”
First Home Loan Deposit Scheme
The FHLDS was introduced last year, and its aim is to enable first home buyers to enter the market sooner by building or buying a first home. The FHLDS seeks to address the financial barriers associated with buying or building a new home. Typically, when a buyer has a deposit that’s less than 20%, they will have to pay lenders mortgage insurance. The FHLDS enables buyers to pay as little as 5% in deposit on a property that is financed by one of the scheme’s eligible home loans. The scheme is administered by the National Housing Finance and Investment Corporation (NHFIC) who guarantee up to 15% of the value of the property to a participating lender. The FHLDS currently has 27 lenders participating in the scheme.
Family Home Guarantee
The Family Home Guarantee is an initiative to help eligible single parents with dependents to buy a family home. The Family Home Guarantee enables eligible single parents to build a new home or buy an existing home with as little as 2% deposit. The NHFIC have also announced that “from 1 July 2021, 10,000 Family Home Guarantees will be made available over four financial years to eligible single parents with dependants.”
For many Aussies, these initiatives come as a welcome support to their goals for buying or building a home. More information is available on the First Home Loan Deposit Scheme, the Family Home Guarantee, and the New Home Guarantee on the National Housing Finance and Investment Corporation website.
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This article is provided for general information purposes only. Its content is current at the date of publication. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article.