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.
This is called the New Home Guarantee.
What is the First Home Loan Deposit Scheme?
The First Home Loan Deposit Scheme (FHLDS) is an Australian Government initiative to support eligible first home buyers purchase their first home sooner.
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 buy their first home with a deposit as little as 5 per cent (subject to lenders credit criteria), with the National Housing Finance and Investment Corporation (NHFIC) guaranteeing up to 20% to the participating lender. It is similar to a parental or family guarantee but in this case the NHFIC acts as a guarantor. The guarantee is not a cash payment.
What is the FHLDS New Home Guarantee?
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 this new scheme.
What Type of Property Can Be Bought Under the Scheme?
- 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
Is There a Maximum Purchase Price?
A revised set of property price caps will apply specifically for eligible properties under the NHG and are detailed in the table below.
$25K HomeBuilder Grant PLUS Commonwealth and State Incentives are still available.
Due to the limited number of slots on offer, we recommend that first home buyers contact us asap so that we can get your applications pre-assessed. To apply and reserve a place in the next round of Scheme places give our finance team a call on 1300 344 888.