First Home Loan Deposit Scheme update

The National Housing Finance and Investment Corporation Amendment Bill 2019 seeks to amend the National Housing Finance and Investment Corporation Act 2018 to establish the framework for the First Home Loan Deposit Scheme to assist eligible first home buyers to access the housing market.

The bill has been passed by the House of Representatives and is currently in the Senate where it is being considered by the Senate Economics Legislation Committee whose report is due by 10 October 2019.

The bill expands the NHFIC’s functions to enable it to ‘issue guarantees to improve housing outcomes’. Under the proposed Scheme the NHFIC would provide guarantees to lenders for eligible first home buyers.

The Scheme details include
• the guarantees provided by the NHFIC on eligible loans will be equal to the difference between the deposit (of at least 5 per cent) and 20 per cent of the property purchase price;
• an annual cap of 10,000 guarantees issued;
• eligibility requirements for applicants, including that the applicant must:
– be a first home buyer,
– be an Australian citizen purchasing property in Australia, and
– satisfy an income test (taxable incomes up to $125,000 per annum for singles and up to $200,000 per annum for couples in the previous year); and
• eligibility requirements for loans, where a loan is eligible if:
– the residential property will be owner-occupied; and
– the purchase price of the property is less than the price cap that applies in the area where the property is located (these regional price caps will be set with a view to ensuring equitable access to the Scheme across Australia).

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