Millions more Aussies will be eligible for a property leg-up, with the federal government announcing a major overhaul of its Home Guarantee Scheme.
In an effort to combat the country’s housing crisis, the government is expanding the eligibility criteria of its home-buying schemes – the First Home Guarantee, the Regional First Home Buyer Guarantee and the Family Home Guarantee.
Here’s what is changing from July 1 this year.
Friends, siblings, family members eligible
Previously, these schemes were only available to people who were married or in a de facto relationship, as well as single people.
Under the schemes, eligible home buyers can purchase a home with a deposit of as little as 5 per cent. The government acts as guarantor on up to 15 per cent of the loan, so the borrower does not need to pay lenders mortgage insurance (LMI).
More families eligible
Legal guardians of children, such as aunts, uncles and grandparents, will be eligible for the Family Home Guarantee.
Previously, only single natural or adoptive parents with dependents were eligible for the scheme.
Under the Family Home Guarantee, eligible home buyers can buy a home with a deposit of as little as 2 per cent. The government acts as guarantor on up to 18 per cent of the loan, so the borrower can avoid paying LMI.
Previous home owners and permanent residents also eligible
The guarantees will also be expanded to non-first-home buyers who haven’t owned a property in Australia in the past 10 years.
Additionally, the three guarantees will be expanded to permanent residents, as well as Australian citizens.
How many guarantees are available?
There are 35,000 places available per year for the First Home Guarantee, 10,000 places per year to June 30, 2025 for the Regional First Home Buyer Guarantee, and 5,000 places per year to June 30, 2025 for the Family Home Guarantee.
How do I apply?
You can check your eligibility for the schemes through the government’s National Housing Finance and Investment Corporation (NHFIC) website.
Applications for the guarantees can be made directly with a participating lender or authorised representative (a mortgage broker).