The First Home Loan Deposit Scheme (FHLDS) is an Australian Government initiative to support eligible first home buyers to build or purchase a first home sooner. The Scheme is administered by the National Housing Finance and Investment Corporation (NHFIC).
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 or build a new home with a deposit of as little as 5 per cent (lenders criteria apply). This is because NHFIC guarantees to a participating lender up to 15 per cent of the value of the property purchased that is financed by an eligible first home buyer’s home loan.
Borrower Eligibility:
Singles:
If you are looking to purchase your first home as the only person named as a borrower in your home loan, then you would apply under the Scheme as a single.
Couples:
If you are looking to purchase your first home with your spouse or de facto partner, where you are both named as borrowers in your home loan, then you would both apply under the Scheme as a couple.
These are the only two types of applications that are eligible under the Scheme:
Home loan arrangements made with family or friends, with more than two borrowers, or any instance where the other borrower is not your spouse or de facto partner, are ineligible for the First Home Loan Deposit Scheme.
Income:
singles – your taxable income for the previous financial year must not be more than $125,000.
couples – your combined taxable income for the previous financial year must not be more than $200,000.
Prior ownership:
The prior ownership test requires you to not have ever owned:
a freehold interest in real property in Australia
an interest in a lease of land in Australia with a term of 50 years (or more), or
a company title interest in land in Australia.
Citizenship test:
The Scheme is only open to current Australian citizens.
Minimum age:
The Scheme is only open to persons that are 18 years of age or over.
Deposit requirement:
There is a minimum deposit requirement for the Scheme.
The Scheme is to assist singles and couples (together) who have at least five per cent (5%) of the value of an eligible property saved as a deposit. The 5% must be made up of genuine savings. If you have 20% or more saved, then your home loan will not be covered by the Scheme.
Owner-occupier requirement:
The Scheme is provided to assist Australians to purchase their first home. Investment properties are not supported by the Scheme.
The Australian Government announced the extension of the New Home Guarantee and the establishment of a new program called the Family Home Guarantee.
10,000 First Home Loan Deposit Scheme places will be available for the 2021-22 financial year from 1 July 2021. An additional 10,000 New Home Guarantee places will be available from 1 July 2021 to 30 June 2022. From 1 July 2021, 10,000 Family Home Guarantees will be made available over four financial years.
Contact us today to apply for FHLDS.
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