First Home Loan Deposit Scheme FHLDS Explained
The First Home Loan Deposit Scheme FHLDS is a government initiative helping first home buyers, both individuals and couples, enter the property market by allowing them to provide a minimal 5% deposit for the purchase price of the property. Effectively the lender’s mortgage insurance is covered by the government for those homebuyers who don’t have the initial 20% deposit to purchase. The government will provide the lender with a guarantee of up to 15% for the loan.
This initiative was first established in January 2020 for 10,000 first home buyers however as of the 1st of July 2021 there will be an additional 10,000 places. To apply you have to earn an annual income of no more than $125,000 for singles and $200,000 for couples. A price cap applies to ensure you purchase a modest home, as opposed to buying a mansion on the canals, and this varies depending on where you live. From the Sunshine Coast to the Gold Coast this cap is $600,000. In my experience, it is becoming harder and harder to find anything under this amount however in certain locations, like Nambour, properties in this price category do come available.
There is also the New Home Guarantee which the government has also decided to offer an additional 10,000 places. This grant is only for first home buyers who are purchasing new homes. This grant provides first home buyers $15,000 towards the purchase of a new home and has a price cap on both house and land of $750,000. Rules apply and similar to the FHLDS the income amounts remain the same. Timeframes of contracts, build dates and move-in dates apply, and not all lenders and loan packages are eligible. And lastly, there is a newer program called the Family Home Guarantee which offers single parents living with dependants a minimum 2% deposit to purchase a home, the same rules apply as per the FHLDS. For more information on what’s available to you please speak with your broker or bank manager or visit the National Housing Finance and Investment Corporation (NHFIC) website, link here – https://www.nhfic.gov.au/