Home Guarantee Scheme eligibility criteria expanded
Following the delivery of the 2023-24 Budget, more Australians will be helped into home ownership sooner with the expansion of criteria for the Home Guarantee Scheme.
Here we take a look at the scheme, who is eligible, how it works and how to apply.
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What is the Home Guarantee Scheme
The Home Guarantee Scheme is an Australian Government initiative to support eligible home buyers to purchase a home sooner.
The Home Guarantee Scheme includes the First Home Guarantee, the Regional First Home Buyer Guarantee and the Family Home Guarantee.
The First Home Guarantee supports eligible first-home buyers to buy their first home sooner, with a deposit as little as 5%. 35,000 places are available each financial year.
The Regional First Home Buyer Guarantee supports eligible regional first-home buyers to buy a home in a regional area with 10,000 places are available each financial year to 30 June 2025.
The Family Home Guarantee supports eligible single parents with at least one dependent child to buy a home, with a deposit as little as two per cent. There are 5,000 places are available each financial year to 30 June 2025.
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Who is eligible for the Home Guarantee Scheme
Currently, under the Home Guarantee Scheme, couples are only eligible if they are married or in a de-facto relationship and other persons buying together, including siblings, parent/child or friends, are not eligible, according to the National Housing Finance and Investment Corporation (NHFIC).
Now, under the Federal Budget, from 1 July 2023, eligibility criteria for all elements of the scheme including the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee will be expanded to any two eligible borrowers beyond married and de facto couples and non‑first home buyers who have not owned a property in Australia in the preceding 10 years.
Australian Permanent Residents, in addition to Australian citizens, will also be eligible for the Home Guarantee Scheme.
For the first time, friends, siblings, and other family members will be eligible for joint applications under the First Home Guarantee and the Regional First Home Buyer Guarantee.
Minister for Housing, Minister for Homelessness and Minister for Small Business Julie Collins MP said households have changed, and the Albanese Government is moving to meet the times.
“We know friends and family members are already teaming up to secure their own place to call home.
“Our actions will allow them to access vital assistance, just as couples have been able to previously.”
The First Home Guarantee and the Regional First Home Buyer Guarantee had been restricted to people that were married or in a de‑facto relationship, in addition to single applicants.
Eligibility will also change for the Family Home Guarantee, expanding it from single natural or adoptive parents with dependents to eligible borrowers who are single legal guardians of children such as aunts, uncles and grandparents.
The guarantees will also be expanded to non‑first home buyers who haven’t owned a property in Australia in the last 10 years to support those who have fallen out of homeownership, often due to financial crisis or relationship breakdown.
All three guarantees will also become available to eligible borrowers who are Australian Permanent Residents, in addition to Australian citizens.
In total, 35,000 places are available per year across the First Home Guarantee, 10,000 places per year to 30 June 2025 under the Regional First Home Buyer Guarantee, and 5,000 places per year to 30 June 2025 under the Family Home Guarantee.
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How the Home Guarantee Scheme works
Part of an eligible home buyer’s home loan, from a participating lender, is guaranteed by NHFIC under the Home Guarantee Scheme enabling them to purchase a home with a deposit between 2-5 per cent (depending on which Guarantee they obtain) without paying Lenders Mortgage Insurance. The Guarantee is not a cash payment or a deposit for a home loan.
NHFIC has authorised a panel of 32 participating lenders to offer the HGS to home buyers.
How to apply for the Home Guarantee Scheme
The NHFIC does not accept applications for the Home Guarantee Scheme or provide personal financial advice.
Applications for the Home Guarantee Scheme can only be made with a participating lender or their authorised representative (a mortgage broker).
The NHFIC recommends 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 Home Guarantee Scheme suit personal circumstances and objectives.
