In the 2021-22 Federal Budget, Josh Frydenberg announced a new scheme to enable single parents to get on the property ladder sooner. Under this scheme, from July 1st, 2021, 10,000 Family Home Guarantees will be made available over four financial years to allow single parents to buy a new home with a deposit of as little as 2%. This will help them to avoid the cost of lenders mortgage insurance (LMI) that usually applies to low deposit borrowers.
How does the Family Home Guarantee work?
The Family Home Guarantee will allow eligible single parents with at least one dependent child to buy a new or existing home faster by putting down a deposit of as little as 2%. These borrowers will need to borrow the remaining 98% and will still need to prove that they can repay the loan. When your deposit is smaller than 20%, lenders normally charge LMI which can amount to thousands of dollars, by acting as a guarantor, the federal government essentially backs the borrower and allows them to avoid this extra home buying cost.
You are eligible if:
- You are single – you do not have a spouse or a de-facto partner.
- You have at least one dependent child.
- You must have a taxable income that does not exceed $125,000 for the previous financial year. (Child support payments are not included as income for the purpose of the income cap.)
- You are an Australian citizen who is at least 18 years old.
- Your name must be the only one listed on the loan and the certificate of title.
- You do not currently own a home. (You can be a first home buyer or someone who has previously owned a home but does not currently own one.)
What type of home can I buy?
The property must be residential and can include:
- An existing house, townhouse or apartment
- A house and land package
- Land and separate contract to build a home
- An off-the-plan apartment or townhouse.
The property price threshold for Queensland is $600,000 for capital cities and regional centres and $450,000 for the rest of the state.
Can I access other Government schemes?
You can access other schemes such as the First Home Owner’s Grant, the First Home Super Saver Scheme and concessions that your State government may have in place, like stamp duty concessions for first home owners.
How do I apply?
You apply through participating lenders and mortgage brokers. Please be aware that there are only 2,500 places available each financial year.
Here is the government’s fact sheet with more information.
At Seek Financial, our professional and friendly team are up to date on all the latest government schemes along with all the latest offers lenders have in place. So if you are a single parent wanting to purchase a home or have found the perfect home and would like more information about your finance options, please don’t hesitate to contact us, we’ll come to you at a time that suits and hold your hand every step of the way.
The above information is general in nature. It has been prepared without taking into account your objectives, financial situation or needs.