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The federal government’s First Home Loan Deposit Scheme, which aims to help people purchase a home with a deposit of as little as 5 per cent without needing to pay for lenders mortgage insurance, began on 1 January. Banks have already registered 3,000 potential first home buyers and 7,000 more places will be allocated from 1 February. Another 10,000 places will become available from July 2020.
If you want an overview of what the scheme is and why it came about, you might want to check out our explainer from earlier in the year. Since we put that together, the National Housing Finance and Investment Corporation (the government body responsible for the program) has provided more details.
In this update, we want to let you know how the scheme might specifically help you if you’re considering buying in a Satterley community in Victoria.
As we mentioned last time, the scheme isn’t open to everyone. Loans will go to home buyers on “low and middle incomes”. For that reason, some fairly strict eligibility criteria apply.
WHAT ARE THE ELIGIBILITY CRITERIA?
There is various criteria that you will need to meet before you can apply for a loan as part of the scheme. We won’t go into all of them here in detail (that’s covered in a handy tool on the National Housing Finance and Investment Corporation website), but one of the most important is the price of the property you intend to purchase.
This is called the property price threshold.
WHAT PROPERTY PRICE THRESHOLD IS RELEVANT TO ME?
If you’re looking to purchase in a Satterley community in Victoria, the price threshold relevant to you will be the Victorian capital city threshold, the cap for which is $600,000.
That means that the price of the property – the land and home – you’re looking to purchase must be under that amount for you to be eligible for the scheme.
(By the way, if you want to double check, or if you’re choosing between multiple properties and locations, you can make sure you have the right threshold by putting the applicable suburb or town name into the Search property price thresholds field on the National Housing Finance and Investment Corporation website.)
CAN I USE THE SCHEME TO BUY LAND AND A HOME?
So long as you and the property you intend to purchase meet the eligibility criteria, you can take advantage of the scheme for buying land and a home as a combination purchase.
According to the National Housing Finance and Investment Corporation, you can make use of the scheme to build your home under a house and land package or a land and separate contract to build.
These are considered two separate ways of buying property and you’re advised that each type has its own set of requirements that are set out here.
HOW DO I TAKE ADVANTAGE OF THE SCHEME?
You can access the scheme through lenders – they’re the financial organisations that offer home loans. (Although the federal government is providing the scheme, they don’t provide the mortgages – only the guarantee.)
At the time of writing this, two major banks and 25 non-major bank lenders are participating in the scheme. You can see the full list here.
Once you’ve established that you’re eligible for the scheme, you can apply for a loan with a reduced deposit through one of these lenders.
If you’d like to know a bit more before you contact a lender, one of our friendly Sales Professionals would be only too happy to help you.
CAN I APPLY THE STATE GOVERNMENT’S FIRST HOME OWNER GRANT AND THE FIRST HOME BUYER DUTY EXEMPTION IN ADDITION TO THE SCHEME?
Yes, you can.
ARE BOTH TITLE AND UNTITLED LAND ELIGIBLE FOR THE SCHEME?
Yes, both titled and untitled land are eligible as long as the contract was signed after 1 January, 2020.
For more information visit the NHFIC website or contact a Satterley Sales Professional.