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Government adds 30k spots to home loan schemes

by Sarah Simpkins5 minute read
Government adds 30k spots to housing grants

The government has expanded the number of places available under its housing support programs by 30,000.

As previously signalled, the Family Home Guarantee, a federal budget measure targeting single parents with at least one dependent child, will have 10,000 more places available for four years from 1 July 2021 – doubling its initial total.

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The scheme will allow recipients, required to have annual taxable incomes smaller than $125,000, to buy a new or existing home with a deposit as little as 2 per cent.

Likewise, the New Home Guarantee, declared in October last year, had been extended in the federal budget with 10,000 new places available for the 2022 financial year.

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The initiative had been launched as a temporary expansion of the First Home Loan Deposit Scheme and it allowed first home buyer recipients to build or buy a new home, with a deposit between 5 to 20 per cent.

The government has repeated the addition of 10,000 places, after it did the same for the 2021 financial year, which was supported by both lenders and aggregators.

Finally, 10,000 additional places have been opened up under the First Home Loan Deposit Scheme for the 2021-22 financial year, doubling the maximum annual number that was available originally.

The scheme allowing eligible first home buyers to purchase an established home or a new home with a deposit of at least 5 per cent was launched in January last year.

Andy Kerr, NAB executive, home ownership commented so far, the big four bank has supported 6,350 customers purchase their first home through the First Home Loan Deposit Scheme. Further, the bank has indicated support for the Family Home Guarantee Scheme. 

"We welcome the new initiative for single parents, recognising that buying a home is often a major challenge for Australians on a single income," Mr Kerr said. 

"We expect the Family Home Guarantee will provide hope and build confidence for single parents to enter or in some cases re-enter the property market."

There will also be new increased property price caps applying from Thursday (1 July) for the First Home Loan Deposit Scheme and Family Home Guarantee, which has been welcomed by industry

"The higher price caps will provide greater flexibility for Australians looking to purchase their first home through the scheme," Mr Kerr commented.

The government decided to raise the price limits, depending on location, at least $50,000 after criticisms that the caps had been too low.

ACT was the only area to retain its property price cap for the 2022 financial year, remaining at $500,000. 

For the next places issued under the First Home Loan Deposit Scheme and the Family Home Guarantee in the new financial year, property price caps will be as follows: 

The capital city price thresholds also apply to regional centres with a population of more than 250,000, with such cities including Newcastle and Lake Macquarie; Illawarra (Wollongong); Geelong; Gold Coast and Sunshine Coast.

[Related: Victorian government announces Big Housing Build sites]

Government adds 30k spots to home loan schemes
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Sarah Simpkins

Sarah Simpkins

AUTHOR

Sarah Simpkins is the news editor across Mortgage Business and The Adviser.

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