What to know about the Regional First Home Buyer Guarantee
The Australian Government launched the Regional First Home Buyer Guarantee on 1 October.
The scheme is designed to support first-home buyers to purchase a home in regional Australia sooner with a deposit of as little as five per cent*.
But what areas are considered regional? And who is eligible?
Here we take a look at the scheme, who is eligible and how to apply.
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1. About the scheme
The Regional First Home Buyer Guarantee (RFHBG) is part of the Home Guarantee Scheme (HGS), an Australian Government initiative to support eligible first home-buyers to purchase a home sooner.
Administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government, the RFHBG aims to support eligible regional first-home buyers to purchase a home in a regional area.
From 1 October 2022 – 30 June 2023, 10,000 RFHBG places are available to eligible regional first-home buyers.
Under the RFHBG, part of an eligible regional first home buyer’s home loan from a Participating Lender is guaranteed by NHFIC. This enables an eligible home buyer to purchase a home with as little as five per cent deposit without paying Lenders Mortgage Insurance.
Any Guarantee of a home loan is for up to a maximum amount of 15% of the value of the property (as assessed by the Participating lender). This Guarantee is not a cash payment or a deposit for a home loan.
2. What is a regional area
A regional area is defined as Statistical Area Level 4 (ASGS SA4 2016) areas. Statistical area level 4 (SA4) is one of the spatial units defined under the Australian Statistical Geography Standard (ASGS).
The Queensland Government provides individual maps for each of the 19 SA4s within Queensland in a pdf format.
The Mackay, Isaac and Whitsunday region is one of these SA4s.
The Australian Government’s Regional Checker allows home buyers to enter the suburb (or postcode) of their current home and the suburb (or postcode) they would like to purchase in, so they can confirm if they would be eligible for the RFHBG.
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3. Who is eligible
To apply for the RFHBG, home buyers must be:
- applying as an individual or couple (married / de facto)
- an Australian citizen(s) at the time they enter the loan
- at least 18 years of age
- earning up to $125,000 for individuals or $200,000 for couples, as shown on the Notice of Assessment (issued by the Australian Taxation Office)
- intending to be owner-occupiers of the purchased property*
- first home buyers who have not previously owned, or had an interest in, a property in Australia
- home buyers (or at least one borrower when applying as a couple) must have lived in the regional area or adjacent regional area they are purchasing in for the preceding 12-month period to the date they execute the home loan agreement (also called the Home Loan Date)*.
* Australian Defence Force member applicants may be eligible for a partial exemption and should check with their Participating Lender if this applies.
To find out if you are eligible, access the Eligibility Tool, a short questionnaire to help home buyers identify which Guarantee/s they may be eligible for.
First home-buyers can also contact a Participating Lender for more information, including the full list of eligibility criteria.
4. Property types
Under the RFHBG, home buyers can purchase a residential property, including an existing house, townhouse or apartment, a house and land package, land and a separate contract to build a home and/or an off-the-plan apartment or townhouse.
To look up the property price caps for each location, use the Property Price Cap Tool. Specific timeframes and criteria apply to the different property types. The contract of sale and (if applicable) eligible building contract may have to be executed by specific dates.
For a full list of property criteria, home-buyers can contact a Participating Lender.
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5. How to apply
Applications can only be made with a Participating Lender or their authorised representative (a mortgage broker).
The NHFIC has authorised a panel of 32 Participating Lenders to offer the HGS to home buyers.
Home buyers (and those advising them) should consider consulting with a Participating Lender, and seeking independent financial and legal advice about whether a particular home loan or property, and the terms of the HGS suit personal circumstances and objectives.
Home buyers applying for the RFHBG need to have between five per cent and 20 per cent of the value of an eligible property saved as a deposit. The minimum deposit required for the RFHBG is five per cent, but Participating Lenders may require a higher percentage deposit based on individual financial circumstances.
Home buyers should speak with a Participating Lender to find out whether a deposit is made up of genuine savings for the purposes of their lending criteria and the RFHBG.
Home buyers should confirm with their Participating Lender whether any cash grants received under other Australian Government, State or Territory schemes or programs can be considered as part of their genuine savings.
For more information and to discuss individual circumstances, contact a Participating Lender. The HGS includes an income test, which is assessed by lenders using a Notice of Assessment (NOA).
Once a tax return has been processed, the Australian Taxation Office (ATO) sends a statement called the Notice of Assessment to myGov Inbox.
For HGS reservations made from 1 July 2022 to 30 June 2023, the relevant Notice of Assessment is the 2021-2022 financial year. NHFIC advises applicants to speak to their Participating Lender to understand the risk of signing a Contract of Sale prior to obtaining the latest Notice of Assessment.
Contact the ATO for more information about Tax Time 2022.
For more information, fact sheets, FAQ and tools and resources about the Regional First Home Buyer Guarantee (RFHBG) visit the Australian Government website here.
And if you are a first-home buyer looking to buy a home in the Mackay, Isaac and Whitsunday region, contact us at Baileux Real Estate. We can help you find the right property for you.
Benjamin Molineux
Principal and licensee
Baileux Real Estate
