Recognising that the greatest barrier to entry for this group is saving for a deposit, the Family Home Guarantee scheme launched just last month and targets single parents with dependent children who have at least a 2 per cent deposit for a property. This Federal Government initiative is administered by the National Housing Finance and Investment Corporation (NHFIC), who guarantee the loans, taking the costly exercise of having to pay lenders’ mortgage insurance out of the equation. The scheme is a real game changer for single parent households – especially those living on one income – providing much needed support that enables them to get into the property market sooner and secure a stable home and future for their families.
As was the case with the similar First Home Loan Deposit Scheme that launched in 2019, the Family Home Guarantee scheme will offer 10,000 places to eligible applicants and run until June 2025. The scheme extends to both new and existing homes and is open to single parents who are first home buyers as well as those who have owned property before and are now re-entering the market for whatever reason. Eligibility requirements state that single parents must have at least one dependant, be an 18 year old or over Australian citizen, demonstrate they are the person who has legally responsibility for the day to day care of the child and have an annual taxable income of $125,000 – this amount however excludes child support payments.
There is flexibility around the type of property that can be purchased too, broadening the scope of the opportunity even further. Properties eligible for purchase under the scheme include existing houses, townhouses, apartments or units, house and land packages, land and a contract to build a new home, and off-the-plan apartments, units or townhouses. There are price thresholds on properties purchased that vary from state to state and depending on whether the property is established or newly built. The breakdown on state-by-state price thresholds on properties can be found in the Family Home Guarantee fact sheet, developed by the NHFIC and released in June 2021.
Sometimes the application process itself can be off-putting, but in the case of the Family Home Guarantee scheme, a list of around 30 participating lenders has been identified.
Empowering single parents to approach the lender of their choice, they can then be guided somewhat through the process by them, as a participating partner. The lenders can also process applications up the pre-approval - applicants must simply provide their tax return from the last financial year. More information about the Family Home Guarantee scheme can be found on the NHFIC website.