Exploring the Latest Updates: New Changes to the Government Home Guarantee Scheme
If you’re looking to purchase a home, we have good news!
It was recently announced that the Federal Government is going to expand the eligibility criteria of the Home Guarantee Scheme on July 1, 2023, with aim to help more Australians buy a home and get into the property market. But first of all…
What is the Home Guarantee Scheme?
As stated by the National Housing Finance and Investment Corporation, the Home Guarantee Scheme (HGS) is an initiative that enables eligible home buyers to purchase a home with a deposit of as little as 2-5%, without having to pay lenders mortgage insurance (LMI). The HGS consists of three government housing guarantees: The First Home Guarantee, The Regional First Home Buyer Guarantee, and the Family Home Guarantee.
What changes have been made to the Home Guarantee Scheme?
The First Home Guarantee, designed to help first home buyers purchase property sooner with as little as a 5% deposit, was previously restricted to married couples, people in de-facto relationships and single applicants. As of July 1, the First Home Guarantee scheme will allow eligible family members, such as siblings, to apply for co-ownership of a home under the scheme. Additionally, friends can jointly apply, as well as non-first home buyers, who haven’t owned property in the last 10 years.
These criteria changes will also apply to the Regional First Home Buyer Guarantee, which is designed to help first home buyers in regional areas to purchase property with as little as a 5% deposit.
The new changes to the First Home Guarantee and the Regional First Home Buyer Guarantee have been made to reflect the current times and the recent shift towards first home buyers wanting to team up and buy property with close friends and family members, rather than with spouses/partners only. The Government’s aim is to also support those who have fallen out of home ownership and help them back into the property market.
There will also be modifications made to the Family Home Guarantee, which provides homeownership support to eligible single parents who have at least one dependent child. The Family Home Guarantee is designed to help them buy a home with as little as a 2% deposit, without having to pay LMI (whether they’re a first home buyer or a previous homeowner). As of July 1, the eligibility criteria will change to include borrowers who are single legal guardians of children, such as aunts, uncles and grandparents.
All three schemes will also be open to eligible Australian Permanent Residents in addition to Australian citizens.
There are limited spaces available for each scheme per year; 35,000 for the First Home Guarantee, 10,000 for the Regional First Home Buyer Guarantee and 5,000 for the Family Home Guarantee. So, be sure to get in touch with your local MoneyQuest Mortgage Broker to discuss your options and find out if you qualify for this Australian Government initiative
Disclaimer:
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