As of today, 40,000 new places have become available under Federal Government programs to help Australians buy their own homes.
The Home Guarantee Scheme includes the First Home Guarantee (FHBG) – previously known as the First Home Loan Deposit Scheme – and the Family Home Guarantee (FHG).
It allows eligible first-time home buyers to buy a property with as little as 5% down payment – and eligible single parents with as little as 2% down payment, while the government guarantees the remaining amount (15% and 18% of the price of the property, avoiding the need for lenders’ mortgage insurance (LMI)).
The number of places available under the Première Habitation Guarantee is now increased to 35,000 per fiscal year, while the Family Home Guarantee will have an annual allocation of 5,000 places from July 1, 2022 to June 30, 2025.
Real estate price ceiling and the number of lenders The program’s offering has also increased this year, giving buyers a wider choice.
The scheme, which is administered by the National Housing Finance and Investment Corporation (NHFIC), has so far helped more than 61,000 Australians buy or build a home.
An additional 10,000 places are also expected to become available in the coming year, once the Labor Government commitment to implement a regional homeownership assistance program is implemented.
NHFIC CEO Nathan Dal Bon welcomed the increase in places under the Australian Government’s Housing Guarantee Scheme, saying: “As an organization we are supporting Australians to across the housing spectrum, from those renting in community housing, to Australians with the aim of home ownership.
“We expect many more Australians to be able to advance the purchase of a home under the expanded scheme.”
Several lenders welcomed the opening of the scheme on the first day of the fiscal year, with NAB’s ehomeownership executive Andy Kerr, pointing out that the program has helped younger buyers and single buyers get a foot on the homeownership ladder sooner.
He revealed that individual NAB buyers bought 63% of homes in the program over the past six months, compared to 49% of non-program purchases.
Of the 63% of First Home Guarantee individual borrowers, 59% were women and 41% were men.
Mr Kerr commented: ‘People who go there alone should not be disadvantaged and we find that the program helps them to buy property,’ Mr Kerr said.
“With a backdrop of slowing house price growth and in Sydney and Melbourne where it is receding, some relief is in sight for first-time home buyers.
“Flexible working gives first-time home buyers more location choices than ever before, with regional purchases in the program up 2% from the same time last year.”
He added: “In an uncertain market, it has never been more important to have the confidence to buy. Getting a quick decision from your bank on a loan is absolutely crucial,” suggesting that around half of eligible customers can now get a decision on their application within 24 hours.
Angus Sullivan, group director of retail banking at CBA (the other major bank involved in the scheme), said the extra places would help even more Australians achieve their home ownership ambitions.
“We understand that our customers are facing increasing cost of living pressures, so the release of additional places is welcome news as it will help more customers realize their home ownership dreams sooner rather than later, with some not having only need a down payment of as little as 2 per cent,” he said.
Great Southern Bank’s Chief Customer Officer, Megan Keleher, also said: ‘Our aim as a bank is to help all Australians own their own homes – so naturally we are committed to helping more people take this step thanks to the housing guarantee programme, .
“We expect Garantie Première Habitation to continue to be very popular. The good news is that the guarantee has 35,000 places available this fiscal year, more than three times as many places available as the first year.
“At the same time, the Family Home Guarantee helps single parents with a dependent child, which is another group that often struggles to save a down payment to buy a house.
“We’ve already helped over 3,500 customers buy their homes through the Australian Government’s homebuyer support programs, and we plan to help many more under the new model.”
[Related: 85% of Family Home Guarantee supplied to single mothers]