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FHB scheme director lauds ‘phenomenal’ brokers

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Reporter 4 minute read

The director of the First Home Loan Deposit Scheme has praised the third-party channel for its contribution to expanding the accessibility of the program.

Earlier this month, an additional 10,000 places became available for first home buyers (FHBs) looking to secure a spot under the government’s First Home Loan Deposit Scheme (FHLDS)

The FHLDS aims to help eligible FHBs enter the property market sooner by reducing the size of deposit needed to secure a mortgage to as little as 5 per cent.

The government has agreed to guarantee the difference between the borrower’s deposit and the standard 20 per cent deposit required to take out a home loan without paying lender’s mortgage insurance.

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According to NHFIC CEO Nathan Dal Bon, the first phase of the FHLDS, which launched in January, generated strong demand across all states and territories, including regional and metro areas.

Mr Dal Bon expects the trend to continue throughout this second phase of the program, “notwithstanding current challenges posed by COVID-19”.

Speaking to brokers in a webinar hosted by the Australian Finance Group (AFG), FHLDS director Jennifer Chew lauded the contribution of the third-party channel, which she said bolstered access to the scheme for FHBs from across the country.

“Brokers write close to 50 per cent of scheme places today,” she revealed.

“I think that’s a phenomenal outcome for the scheme as well as customers, because we have the reach that we would never have had if we were reliant on a retail network only.

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“[We also] would definitely not have had the reach in terms of the diversity of customers that we get.”

Both the Finance Brokers Association of Australia (FBAA) and the Mortgage & Finance Association of Australia (MFAA) have previously urged brokers to be proactive with their first home buyer clients.

Applications for the second phase of the scheme require a 2019-20 notice of assessment from the Australian Taxation Office to demonstrate that their taxable income is no more than $125,000 for individuals and $200,000 for couples, as per the eligibility criteria.

[Related: Brokers wrote half of FHLDS loans]

FHB scheme director lauds ‘phenomenal’ brokers
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