The Home Guarantee Scheme (HGS) is the new name for the First Home Loan Deposit Scheme (FHLDS) which is a government initiative to assist first home buyers get into the housing market sooner, with limited deposit/savings, without having to pay the expensive and limiting LMI fees which are simply a fee that provides no protection to the buyer, only the lender. Usually, buyers need a 20% deposit to avoid the LMI fees. This is a scheme based around the similar concept of a Parental guarantee where parents provide a guarantee backed by property security for the shortfall in deposit. In this scheme the government provide the guarantee (no security) to allow a buyer to only need a minimum 5% genuine savings and meet other criteria and the normal lenders credit criteria to proceed. The guarantee is not a cash deposit or payment for your loan. You can still apply for other government grants / first home benefits if eligible. Due to its success and popularity has undergone a number of changes for the 2022-2023 financial year.
- The number of places available per financial year for the will increase from 10,000 to 35,000
- The New Home Guarantee (construction of a new dwelling) will cease June 30th, 2022, as the new scheme will replace this.
- There will be only two types of guarantees, the First Home Guarantee (FHBG), and a second guarantee scheme for single parents, called the Family Home Guarantee (FHG) which will have 5000 places for 2022-2023 financial year. This Family Home Guarantee only requires a 2% genuine savings deposit amount, with other criteria to apply.
There are increased purchase or house and land package price caps from July 1, 2022. For WA the house and land package or established property purchase price is $600,000 in Perth metro and $450,000 in regional areas. Note this is the same price cap for all guarantees from July 1 whereas prior to this date there were different price caps depending on the type of guarantee.
There are also criteria to meet to qualify to apply for this guarantee;
- All borrowers must be Australian Citizens (not permanent residents) no exceptions
- All borrowers must be owners of the property (on the title)
- There are income caps, maximum income for single $125,000 taxable income and $200,000 for couples. Relates to the previous financial year, shown by providing the individual Notice of Assessment.
- You must buy a house and land not just land.
- The NFHIC website will be updated in July , currently showing only the 2021 financial year information
We have access to many of the HGS lenders and can compare loan products and rates, prepare the application and all government forms, obtain approvals and liase with the real estate agent, settlement agent, building company representative, lender, government departments and buyers. We do not charge a fee and receive a commission on settlement from the lender separate from buyer fees.