First Home Guarantee – Benefits

First Home Guarantee – Benefits

Starting July 1st, 50,000 new spots are available for home buyers under the federal government’s Home Guarantee Scheme. This initiative includes the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee, all popular among mortgage broker clients. These schemes are now open for FY25 submissions, allowing more Australians to enter the property market with a smaller deposit.

The Home Guarantee Scheme, overseen by Housing Australia, helps home buyers secure a mortgage with a low deposit without paying Lenders Mortgage Insurance (LMI). Eligible buyers can apply for a loan through one of 32 participating lenders, needing only a 5% deposit for the First Home Guarantee or the Regional First Home Buyer Guarantee, and just a 2% deposit under the Family Home Guarantee. The federal government guarantees the remaining amount.

From 1 July, there are:

• 35,000 places for the First Home Guarantee (FHBG),
• 10,000 places for the Regional First Home Buyer Guarantee (RFHBG) until 30 June 2025, and
• 5,000 places for the Family Home Guarantee (FHG) until 30 June 2025.

Nathan Dal Bon, CEO of Housing Australia, stated: “Housing Australia is delighted to offer 50,000 new places in a key Government housing program that provides more Australians and permanent residents with greater access to the property market, enabling them to bring forward plans to buy their own home.”

Understanding the Home Guarantee Schemes

First Home Guarantee (FHBG)

The FHBG aims to help first-time home buyers purchase a property with a deposit as low as 5%. This scheme is perfect for those who have been struggling to save a larger deposit but are ready to own their home. With 35,000 new spots available, many more Australians will have the opportunity to achieve home ownership sooner.

Regional First Home Buyer Guarantee (RFHBG)

The RFHBG is tailored for first-time buyers in regional areas, also requiring only a 5% deposit. This scheme not only promotes home ownership but also encourages population growth and investment in regional communities. There are 10,000 new places available under this scheme until 30 June 2025.

Family Home Guarantee (FHG)

The FHG is designed to support single parents with dependants, enabling them to purchase a home with just a 2% deposit. This scheme recognises the unique financial challenges single parents face and provides a significant boost towards securing a stable home environment for their families. There are 5,000 places available under this scheme until 30 June 2025.

How to Apply

Eligible home buyers can apply through one of the 32 lenders participating in the scheme. These lenders have been approved by the federal government and are experienced in managing applications under the Home Guarantee Scheme. The application process involves:

1. Checking Eligibility: Ensure you meet the criteria for the scheme you are applying for. This includes being an Australian citizen or permanent resident and meeting specific income and property value caps.
2. Choosing a Participating Lender: Select a lender from the approved list to start your application. Each lender will have its own process, but all will adhere to the guidelines set by the government.
3. Preparing Your Application: Gather necessary documents, such as proof of income, savings, and identity. Your chosen lender or broker will guide you through the specific requirements.
4. Submitting Your Application: Work with your lender to submit your application. If approved, you can proceed with the home buying process with the benefit of the government guarantee.

Benefits of the Home Guarantee Scheme

The primary advantage of these schemes is the ability to enter the property market with a smaller deposit, bypassing the need for LMI. This significantly reduces the upfront costs associated with buying a home. Additionally, the government’s guarantee provides lenders with confidence, which can lead to more favourable loan terms for buyers.

The expansion of the Home Guarantee Scheme offers a fantastic opportunity for many Australians to achieve their dream of home ownership. With 50,000 new spots available, this initiative is set to make a significant impact on the housing market, providing more accessible pathways to owning a home. If you’re considering buying a home, now is an excellent time to explore your options under the Home Guarantee Scheme. Contact Tothill Finance today to start your journey towards home ownership.