Non-major lenders were asked to explain why they should be able to offer mortgages backed by government programs for first-time home buyers and single parents.
The National Housing Finance and Investment Corporation (NHFIC) has launched a Request for Proposals (RFP) process to add more mortgage providers to its panel of non-major lenders for the First Home Loan Deposit Scheme (FHLDS) and Family Home Guarantee (FHG) .
The body administers three schemes on behalf of the government: FHLDS, which aims to help first-time home buyers enter the property market; the New Home Guarantee, which helps eligible borrowers build or buy a new home; and the FHG, which helps single parents with at least one dependent child buy a family home.
The FHLDS and FHG allow first-time home buyers and single-parent families to buy a home with as little as 5% or 2% down payment respectively.
The programs are offered through a panel of lenders including two major lenders and 25 other lenders.
NHFIC commissioned an independent review of program performance and opportunity last year, which concluded that it would be beneficial to consider expanding their lender panels.
The programs were deemed to be working effectively and existing lenders should stay – but the review also concluded that the FHLDS had greatly benefited first-time home buyers who could have purchased a property within one to two years without help.
Non-major lenders have been invited to respond to the tender and express their interest, with the NHFIC saying it will consider how many lenders would complement and strengthen the existing panel.
The updated panel of non-major lenders is expected to come into effect on July 1.
NHFIC said it was looking to expand its pool of lenders to improve accessibility and reach of programs, to support more eligible customers.
“We expect a lot of interest from lenders based on our continued dialogue with key stakeholders,” the agency said on its website.
This decision was made as additional places in the First Home Loan Deposit Scheme (FHLDS) became available from Monday 31 January.
In December, the government decided to roll over 4,651 unused grants under the Housing Guarantee Scheme from fiscal year 2021, giving a second chance to first-time homebuyers shattered by COVID-19 disruptions.
Up to 2,236 additional places will be available for non-major lenders.
Great Southern Bank said it had a waiting list of customers looking for one of the newly available places in the scheme.
To date, it has helped 2,500 clients settle under the FHLDS since January 2020 and another 500 buyers under the New Home Guarantee and Family Home Guarantee.
Great Southern Bank chief executive Megan Keleher said: “With house prices rising faster than incomes, saving a house deposit has become an increasing challenge for more and more home buyers. a first home.
As of October, the Family Home Guarantee, FHLDS and New Home Guarantee had seen 52,888 people buy a home or reserve a place in one of the programs since January 1, 2020.
Government data from December had shown that one in five FHLDS guarantees went to essential workers (about 6,000 in total), with around a third (34.8%) of them going to nurses.
Just over half (52%) of FHLDS guarantees went to women, a proportion above the overall market average of 41%.
More than half (58%) of FHLDS beneficiaries were under 30 years old.
Homebuyers were able to advance their home purchases by an average of four years for the FHLDS and 4.5 years for the new home warranty.
The three guarantees of the Home Guarantee had been extended in July last year, with 10,000 places added in each programme.
The New Housing Guarantee will end on June 30. Unless the government changes its deadline, lenders will not be able to offer NHG-backed loans beyond June.
In December, the NHFIC also partnered with Landcom to explore potential housing supply solutions across New South Wales.
[Related: Hundreds take up SA state-backed home loan scheme]
Sarah Simpkins is the managing editor of Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth management for InvestorDaily and ifa.