Did you know?
Owning a home as single parent has become more attainable with a newly introduced government scheme. This is known as the Family Home Guarantee and aims to support eligible single parents with at least one dependent child in purchasing a family home, regardless of whether that single parent is a first home buyer or a previous home owner.
10,000 Family Home Guarantees will be made available over four financial years from 1 July 2021 to 30 June 2025.
Under this Scheme, part of an eligible home buyer’s home loan from a Participating Lender will be guaranteed by NHFIC (National Housing Finance and Investment Corporation). This is aimed at enabling you to purchase your first home sooner with as little as a 2% deposit.
Applicants must be Australian citizens, at least 18 years of age and have an annual taxable income of no more than $125,000 excluding child support payments. You must also be the sole applicant listed on the loan and certificate of title with a least one dependent child. You will need to have your 2020-21 tax return completed and have received a notice of Assessment from the ATO.
You must not be married or in a de-facto relationship,
The property you are looking to purchase must be an acceptable property type and within the property price threshold for your suburb and postcode. You can view the property price cap for your suburb on NHFIC’s website
Lenders Mortgage Insurance fees are waivered which is fantastic news – this is a type of insurance that borrowers with a smaller deposit need to pay for when they take out a home loan. It covers the lender (not you, the borrower) from financial loss if you cannot repay your loan.
If you are borrowing over 80% of the value of a property (in other words, your deposit is less than 20%), you will need to pay LMI.
For example, a single parent hoping to purchase a $460,000 home would typically need to save a 20% deposit of $92,000 to avoid paying lenders mortgage insurance.
Under the Family Home Guarantee, and on the success of their application with a lender, they could secure the property with a 2% deposit of $9200 – on top of other upfront costs, such as stamp duty and conveyancing fees.
RESOURCES:
A fact sheet with further information is below:
https://www.nhfic.gov.au/media/1713/family-home-guarantee-fact-sheet-july-2021.pdf
Check your eligibility:
https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home
Where to apply:
All applications for the Family Home Guarantee need to be made directly with one of the Scheme’s Participating Lenders (or their authorised representatives, ie a mortgage broker). We would encourage you (and those advising a single parent) to consult with a Participating Lender, as well as seek your own independent financial and legal advice on how to structure your loan arrangements in a way that suits your own personal circumstances.
https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home/family-home-guarantee/how-to-apply/
What didn’t change:
– Stamp Duty still needs to be paid as per normal.
– Conveyancer costs still to be paid as per normal.
Feel free to contact us on if you require any more information, we will be happy to point you in the right direction.