It can be remembered that as part of the 2020-21 Federal Budget, Treasurer Josh Frydenberg emphasised that home ownership will continue to be empowered. Just over the weekend, the Morrison government announced some good news for single parents and first home buyers.
Effective from 01 July, there will be an additional 30,000 places for eligible applicants under the First Home Loan Deposit Scheme, the New Home Guarantee program, and the Family Home Guarantee.
Australian Assistant Minister to the Treasurer, Michael Sukkar, explained that “through our First Home Loan Deposit Scheme and the New Home Guarantee Program, the Morrison government is helping more first home buyers and single parent families overcome the challenges of saving for a deposit and realising the Australian dream of owning your own home.”
The Real Estate Institute of Australia (REIA) then had urged buyers to consider applying for federal deposit guarantee schemes upon the addition of places. With this, single parents and first home buyers may either build a new home or purchase an existing home with a deposit of as little as 2%.
REIA President, Adrian Kelly, encouraged eligible applicants to contact a participating bank or mortgage provider to process their application. “It can be difficult to buy a new home or re-enter the housing market, and that saving a deposit is the hardest part of getting into home ownership so the government support will help ease that issue,” he stressed.
Mr. Kelly also mentioned that since the introduction of the First Home Loan Deposit and New Home Guarantee, 30,000 Australians have been able to enter the housing market. By having more people in the market, we are also welcoming economic security for Australians, especially women, in this instance, who make up the majority of custodial parents.
To learn more about the programs and schemes that both first home buyers and single parent families may avail (and to know if you’re eligible for these opportunities), below are the details for your reference:
First Home Loan Deposit Scheme
Administered by the National Housing Finance and Investment Corporation (NHFIC), this initiative aims to support eligible first home buyers to build or purchase their first home sooner. Under this scheme, first home buyers may now secure a house with a deposit of as little as 5%.
Before, buyers with less than 20% deposit still needed to pay lenders mortgage insurance. With this scheme, “NHFIC guarantees to a participating lender up to 15% of the value of the property purchased that is financed by an eligible first home buyer’s home loan”. Applicants, in order to avail this, should coordinate directly to any of the Scheme’s twenty-seven (27) participating lenders or their authorised representatives.
New Home Guarantee Program
Directly connected with the initial scheme, the additional 10,000 First Home Loan Deposit Scheme places in the 2020-21 Federal Budget is known as the New Home Guarantee.
Under this, first home buyers can build and/or purchase a new home including newly-constructed dwellings, off-the-plan dwellings, house and land packages, and land with a separate contract to build a new home, all with specific dates and requirements.
“Eligible first home buyers can use the New Home Guarantee in conjunction with other government programs like the First Home Super Saver Scheme, HomeBuilder grant or state and territory First Home Owner Grants and stamp duty concessions.”
Family Home Guarantee
Regardless if you are a first home buyer or have previously purchased a house, this program aims to help eligible single parents with dependents in securing a home.
Under this scheme, single parents will have the opportunity to either build a new house or purchase an existing home with a deposit of 2%, subject to the individual’s ability to service a home loan. Some of the other qualifications include the following: (1) applicants must be Australian citizens; (2) they are at least 18 years of age; and (3) they should have an annual taxable income of no more than $125,000.
“By supporting single parents, and their children, we are helping them achieve the security and dignity that home ownership provides,” Mr. Kelly said.
This expansion of government-led guarantees will definitely help Aussies who are first home buyers and/or single parents secure their own property, especially in this time where affordability in terms of real estate is a major concern.
Our Team at 4one4 Property Co. will talk more about this in the next few episodes of The Property Pod, so, if you have any questions or hesitations right now, you better stay tuned to our program!
