First Home Loan Deposit Scheme (FHLDS) gets a facelift & new Family Home Guarantee (FHG) introduced
Announced in the Federal budget, the Family Home Guarantee (FHG) is designed to help single parents enter the market with less deposit. This potentially suits those who are coming back into the market after divorce or separation - or those who are renting and find it difficult to save, regardless if they have owned property before or not. This guarantee scheme sees the Federal Government guaranteeing the balance of the usual deposit in order for you to have no mortgage insurance, get around the minimum deposit amounts, and access economic interest rates.
Now, it's being advertised as "2% deposit", and thats true - but it isn't just 2% of the purchase price you need. You also need to have "enough" to cover your legal fees, other government charges and loan application fees - lets say an average of $4,000 for these in NSW - and stamp duty if it applies to you (up to around 3.9% of the value of the home depending on if you are buying your first home or not)
You also have to meet lender criteria, and one of the most challenging things about this for single parents is
you have the full cost of utilities & rates to consider
you by virtue of the scheme - have the full cost of the dependants (lenders don't allocate half a dependant for shared care, for example)
including child care costs very often
and some of the income types are not acceptable to all lenders (child support, single parenting pension, and family tax benefit for example all have age limits & strict criteria for lenders to accept them - if at all)
This lending criteria is true regardless of using the scheme or not - Its still a really great leg up!
The other announcement was the facelift to the First Home Loan Deposit Scheme - both for new and established homes - seeing an increase in the maximum property value which was so very necessary, as well as an extension to the time you have to start constructing a new home under the scheme.
This summary and a media release attached:
New Property Price Caps for First Home Loan Deposit Scheme and Family Home Guarantee
The Australian Government has announced new property price caps for the First Home Loan Deposit Scheme and the Family Home Guarantee, which apply from 1 July 2021. 10,000 First Home Loan Deposit Scheme places will be available to eligible first home buyers for the 2021-22 financial year, while the New Home Guarantee has been extended with additional 10,000 places available from 1 July 2021 to 30 June 2022 for eligible first home buyers purchasing a new home. The New Home Guarantee will now have a construction commencement timeframe of 12 months.
