Strong first home uptake from single mums for low deposit government scheme

The Family Home Guarantee, helping single parents purchase a property with as little as a 2 per cent deposit, has been accessed by 1236 buyers since the scheme began on July 1. The Family Home Guarantee can be used to build a new home or buy an existing home with a deposit of as little as 2% without having to pay Lenders Mortgage Insurance. Eligible residential properties include: • an existing house, townhouse or apartment • a house and land package • land and a separate contract to build a home • an off-the-plan apartment or townhouse. Housing Minister Michael Sukkar said initial applications push had exceeded Treasury forecasts. Some 84 per cent “were single mums looking to provide the security of homeownership for their children,” Sukkar said. “The number of new homeowners is particularly encouraging among single parents, given the challenges of saving a deposit while on a single income and raising children,” Mr Sukkar said. The Family Home Guarantee was announced in the May budget. It is available to single parents with at least one dependent child who earned $125,000 or less last financial year. From 1 July 2021, 10,000 Family Home Guarantees will be available to eligible single parents with dependants. Both first home buyers and previous home owners can apply, but not investors. The scheme, set to run until June 30, 2025, has capital city and regional price thresholds. Loans under the Family Home Guarantee require scheduled repayments of the principal and interest of the loan for the full period of the agreement. The loan agreement must have a term of no more than 30 years. The Family Home Guarantee program, administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government, guarantees to a participating lender up to 18 per cent of the value of the property. Sukkar says this will enable single parents with dependants to enter, or re-enter, the housing market sooner.