The First Home Loan Deposit Scheme is one of the many programs which aims to support first-time home buyers. This has been helping many Australians pay less for their deposit for lenders’ mortgage insurance. The scheme entitles all eligible home buyers to purchase a modest home with as little as a 5 percent deposit.
In the 2020-2021 federal budget, the Australian Government has announced an additional 10,000 FHLDS places for the financial year. These are known as the First Home Loan Deposit Scheme (New Homes). As of today, there are 27 participating lenders in Australia.
How can FHLDS help you?
Typically, an aspiring first-home buyer needs to save at least 20% of the property value in order to secure a home loan and avoid paying the Lenders Mortgage Insurance. But with the help of FHLDS, you can contribute a minimum of 5% of the property value and The National Housing Finance and Investment Corporation (NHFIC) can provide a guarantee to the lender to cover 15% of the property purchased that is financed by an eligible first home buyer’s home loan.
What type of properties can be purchased under FHLDS?
- A land with a contract to build a home
- An apartment or townhouse
- A house and land package
How to Apply?
Applications can be done through all participating lenders. To apply you must first pass the eligibility criteria and be able to provide the correct documentation to secure your position. Here are the criteria:
- You must be a ‘first home buyer’ meaning you don’t own any other residential property whether as an investment or owner-occupied.
- You must be earning less than $125,000 or $200,000 for couples in the last financial year.
- Couples should be married or in a de facto relationship. Other people buying together such as parent/child, siblings, or friends are not eligible.
- You must be at least 18 years of age with a valid Medicare Card.
- You must be an Australian citizen with proof of citizenship.
- You must deposit between 5% to 20% of the property value
- Your purchased property must be an acceptable property type and within the price threshold.
Moving In and Building Considerations
The applicant must move within six months of settlement of their home loan if they are purchasing an existing home.
For new homes – If it’s a house and land package, the building must start within 12 months and the building must be finished within 24 months of the settlement date for your home loan. You should also move into the property within six months after the occupancy certificate has been issued.
For separate contracts for land purchase and home construction, you need to be in an eligible building contract within six months. You should also start building your home within 12 months and finish after 24 months.
For off the plan purchased homes, you must sign the contract of sale before the settlement date of your home loan. You should also move into your property within six months of the occupancy.
Find your eligibility and the best way to benefit from these grants & concessions in 2021. Contact us or call Anand on 0413 403 621 to get started.