FHLDS New Home Guarantee - waitlists now open
As part of the 2020-21 Federal Budget, the Australian Government has committed an additional 10,000 First Home Loan Deposit Scheme (FHLDS) places for the 2020-21 financial year, specifically for eligible first home buyers purchasing new homes.
Usually first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance. Under the Scheme, eligible first home buyers can purchase a modest home with a deposit with as little as 5 per cent (lenders criteria also apply). This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan.
The ‘New Home Guarantee’ (NHG) has been established to support the Government’s economic stimulus measures and create jobs in the residential construction sector.
The additional 10,000 guarantees will be made available in 2020-21 for eligible first home buyers to build a new dwelling or purchase a newly built dwelling with a deposit of between 5 and 20 per cent of the property’s value (lenders criteria applies). A revised set of property price caps will apply specifically for eligible properties under the NHG. Though the exact date for the new round of guarantees is still yet to be confirmed, both NAB and CBA have commenced waiting lists for applicants eligible for scheme reservations.
What is a 'new home'?
Eligible NHG properties include:
newly constructed dwellings (e.g. whether a freestanding house, townhouse or apartment)
off-the-plan dwellings (e.g. whether a freestanding house, townhouse or apartment)
house and land packages
land and a separate contract to build a new home.
To be eligible, the borrower purchasing the newly built dwelling must be a first home buyer.
Who is eligible?
The eligibility criteria for the NHG is the same as the criteria for the FHLDS. Applicants must:
be Australian citizens
be at least 18 years old
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)
have between 5 and 20 per cent of the value of an eligible property for the loan deposit
have a taxable income of up to $125,000 per annum for the previous financial year (if applying as a single applicant)
have a combined taxable income of up to $200,000 per annum for the previous financial year (if applying as a couple* application)
intend to be owner occupiers of the property**
You need to satisfy all these checks to qualify for the NHG. If you don’t meet the requirements for one or more of these checks, or have questions about any of these matters, you should seek advice on your application from a participating lender.
* Only single (individuals) or couples are eligible for the NHG. Couples are defined as those who 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 NHG.
** Investment properties are not eligible for the NHG. In the case of active Australian Defence Force member applicant(s), 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.
What are the revised property price caps?
A revised set of property price caps will apply specifically for eligible properties under the NHG and are detailed in the table below.
To find out more or start the ball rolling on a pre-approval to secure a New Home Guarantee, contact Geoff today!