The First Home Loan Deposit Scheme will rely on applications being lodged through participating lenders and brokers, with the government reportedly working with industry to build a broker resource portal.
Brokers are to play a “critical” role in the rollout of the federal government’s First Home Loan Deposit Scheme (FHLDS), as one of just two channels available to first home buyers looking to take advantage of the scheme, according to the Mortgage and Finance Association of Australia (MFAA).
Once the National Housing Finance and Investment Corporation’s scheme commences on 1 January 2020, applications will be lodged through participating lenders and their brokers. NHFIC will not accept applications directly.
The FHLDS will support up to 10,000 first home loan guarantees each financial year. Eligible borrowers can use the guarantee in conjunction with other government programs like the First Home Super Saver Scheme, state and territory First Home Owner Grants and stamp duty concessions.
The MFAA revealed that it had been “actively involved” in the consultation process for the FHLDS, making submissions on the scheme to both Treasury and the National Housing Finance and Investment Corporation regarding the significance of broker involvement.
According to the MFAA, to help brokers understand and utilise the guarantee scheme, a new broker resource platform will be launched by the NHFIC in due course, which will reportedly include support and information for brokers on how to help their first home buyers customers secure the government guarantee.
In an update to members, the broker association’s CEO, Mike Felton, said: “Through the consultation and our ongoing contact with NHFIC, we have stressed the importance of broker involvement in the scheme and the critical role brokers play in driving competition and providing assistance to FHBs, which has been acknowledged.
“NHFIC has, in consultation with the MFAA, been working to produce support resources and a dedicated information portal to assist brokers with borrower eligibility criteria and the process involved in securing the guarantee for broker customers.
“At present we are waiting on finalisation of the processes for the scheme from NHFIC, at which point the broker resource materials will be completed and we will commence rolling out to our members.”
“We are obviously aware of the tight deadlines, but it is out of our hands at present,” he added.
Apart from brokers, the only other way for first home buyers to gain access to the FHLDS is to apply directly through participating lenders.
Earlier this week, NAB was announced as the first lender joining the NHFIC’s lender panel, meaning the big four bank will be one of two majors with the ability to write loans for FHBs who have saved deposits as little as 5 per cent, under the FHLDS. The second major bank has not yet been revealed.
According to the NHFIC’s investment mandate, the two major banks on the lending panel will only be permitted to write up to 50 per cent of the 10,000 guarantees allocated per financial year.
The NHFIC has said that it will announce the full panel of participating lenders by 20 December 2019 at the latest, with the scheme due to commence on 1 January 2020.
According to the NHFIC, members of the panel will be chosen on the basis of competitiveness of offerings, geographic reach, customer care, and their ability to meet the 1 January deadline for the implementation of the scheme.
Further, the NHFIC and federal Minister for Housing and Assistant Treasurer Michael Sukkar have stated that members on the lending panel will not be able to charge eligible customers higher interest rates than equivalent customers outside the scheme.
Hannah Dowling is a journalist for The Adviser and Mortgage Business.
Prior to joining Momentum Media, Hannah worked as a content producer for a podcast catering to property investors. She also spent six years working in the real estate sector at a local agency.
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