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  • Michael Volschenk

The First Home Loan Deposit Scheme – Greater help from the Government for first home buyers


In 2018, the Australian Government established the National Housing Finance and Investment Corporation (NHFIC) whose main purpose is to assist Australians by increasing the supply and affordability of housing. One of the many ways that NIHFIC achieves this is through the provision of grants and schemes.

One of those schemes is the First Home Loan Deposit Scheme (Scheme) which aims to help first home buyers, who meet specific eligibility criteria, to purchase their first home sooner.

How does the Scheme work?

The Scheme allows an eligible first home buyer to purchase a home with as little as a 5% deposit (but still subject to the lender’s criteria). Under the Scheme, the Government guarantees the difference between the eligible applicant’s deposit (of at least 5%) and 20% of the value of the eligible property. This removes the need for the applicant to purchase mortgage lender’s insurance.

The Scheme is limited to 10,000 places for the 2019 - 2020 financial year, with a further 10,000 places being released from 1 July 2020.

These places are only available from participating lenders, so be sure that your lender is on that list..

What are the requirements?

In order to be eligible for one of the 10,000 places, an applicant would need to satisfy eligibility requirements for both the applicant and the property.

1. Applicant eligibility

To be eligible to participate in the Scheme, the applicant must pass:

  • an income test;

  • a prior ownership test;

  • a minimum age test;

  • a deposit requirement; and

  • an owner-occupier requirement


2. Property eligibility requirements

In addition to the NHIFC’s purposes, the Scheme was intended to help first home buyers purchase a modest home, or purchase land and construct a modest home.

As such, along with the applicant meeting the above criteria, the following must also be met with respect to the property:

  • it must be a ‘residential’ property;

  • it must be under the price cap for its location;

  • it must have the first homer buyer listed as the sole owner on settlement; and

  • it must be “(1) an established dwelling, or (2) a new-build dwelling that is purchased under a house and land package, a land and separate contract to build a home, or an ‘off-the-plan’ arrangement that is financed under an Eligible Loan from a participating lender.”

Further information about the Scheme, including eligibility, is available here: https://www.nhfic.gov.au/what-we-do/fhlds/.

If you would like assistance in relation to the purchase of a property, please do not hesitate to contact our specialist property team who will help you to navigate the process.

This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.



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