Non-majors begin offering FHLDS loans

To date, more than 3,000 of the 10,000 loans available for this financial year have been pre-approved, with the remaining 7,000 available as of this weekend.

On Saturday (1 February), the remaining 25 lenders (non-major banks, credit unions and non-bank lenders) opened their doors to applications – expecting to write half of the 10,000 loans that come with a government guarantee.

Non-major banks are now able to accept submissions to the scheme. However, only a handful are offering these loans through the broker channel.

Notably, non-bank lender Mortgageport has announced that it is using the FHLDS scheme as an opportunity to deepen its relationship with the broker channel.

Mortgageport managing director Glen Spratt commented: “Mortgageport wants to work with a select number of experienced and larger mortgage brokers collaboratively and provide an offering that will help them attract new customers, not just service their existing customer base.”

According to Mortgageport, it will only work with mortgage brokers directly accredited with the lender, instead of offering the product through mortgage aggregators.

Tony MacRae, MyState Bank’s general manager, banking, also recently called on brokers to move quickly if they want to assist their clients in securing one of the 10,000 spots available within the scheme.

Likewise, Auswide Bank’s managing director, Martin Barrett, said: “We are looking forward to continuing to help customers to achieve home ownership like we have for the past 50 years. Securing a place in the scheme is important for these first home owners, and we are committed to delivering the best opportunity at securing a place in the scheme for them.”

Noting that the vast majority of lenders included on the panel are mutual banks and credit unions, the chief executive officer of the Customer Owned Banking Association (COBA), Michael Lawrence, welcomed the expansion of the scheme to these lenders.

Mr Lawrence said: “Customer owned banking institutions have been helping prospective first home buyers with assembling documentation and preparing applications to assist with timely lodgements from 1 February.

“Applicants will now be able to choose from a panel of 27 lenders, bolstering choice under the scheme. Customer-owned banking institutions deliver highly competitive pricing and an unmatched customer focus.

“While pre-approvals are set to continue at a fast rate, applicants who are worried about missing out will have ample opportunity in the months to come. The scheme will release a further 10,000 loans at the commencement of the new financial year.

“Customer-owned banking institutions have a long tradition of helping first home owners enter the property market. They have specific products and ways to help buyers, so always ask for help.”

The NHFIC last year announced its full panel of lenders taking part in the FHLDS, but industry representatives have criticised the scheme for its limited reach and the fact that few of the chosen lenders are making the FHLDS loans available through the broker channel.

Mortgage Choice CEO Susan Mitchell recently highlighted the 10,000 loan cap means that for FHBs, “getting a place in the scheme might be as unlikely as securing a winning lottery ticket”, a concern that has also been shared by other industry leaders.

“While the scheme does what it says on the box and allows some first-time buyers to enter the property market sooner without having to pay LMI, the fact that it is available to such a small number of Australians is disappointing,” Ms Mitchell said.

[Related: Mortgage Choice CEO weighs in on FHB scheme]