The Federal Government's First Home Loan Deposit Scheme began on January 1, 2020 and is designed to provide a guarantee allowing eligible first home buyers on low and middle incomes to buy a home with a deposit of as little as five per cent.
It will support up to 10,000 loans each financial year and will be subject to eligibility criteria in relation to income thresholds and property prices. A summary of the eligibility criteria can be found on the National Housing Finance and Investment Corporation (NHFIC) website at www.nhfic.gov.au/what-we-do/fhlds/
Initially 10,000 scheme places will made available from January 1, 2020 and a further 10,000 will be made available from July 1, 2020 for the 2021 financial year. Of the 10,000, 5000 will be made available through two major lenders, and 5000 will be made available through the 25 non-major lenders appointed to the panel.
The lenders are currently establishing processes to accommodate the product in their systems. They should all be up and running by February 1, 2020.
You cannot apply to NHFIC directly to have your home loan participate in the scheme. You can only do so as part of your home loan application directly with a participating lender or via your mortgage broker.
The eligibility of your home loan to participate in the scheme will be considered by your lender and, if eligible, the lender will notify you that your home loan is able to participate in the scheme.
Are you eligible? You need to consider whether your personal circumstances satisfy all of the following checks. They relate to your eligibility as a first home buyer who can participate in the scheme.
The key checks for your personal circumstances are:
- an income test
- a prior property ownership test
- a citizenship test
- a minimum age test
- a deposit requirement
- an owner-occupier requirement
Some of these checks may be different depending on whether you are applying for a home loan as a single or as part of a couple.
To satisfy the income test:
- for singles - your taxable income for the previous income year must not be more than $125,000, or
- for couples - your combined taxable income for the previous income year must not be more than $200,000. For all scheme place applications made from January 1, 2020 to June 30, 2020, the relevant income year will be the 2018-19 income year. Income years before then are not considered for the income test.
There are also property price caps that you need to be aware of. Contact a knowledgeable mortgage broker to find out all the details and check your eligibility and lender options available to you.
Olympia Andronicos is a credit representative (507463) of BLSSA Pty Ltd ACN 117 651 760 (Australian Credit Licence 391237). Choice Finance Specialists 0418 690 628.