What is the Housing Australia home guarantee Scheme?

The Home Guarantee Scheme (HGS) is an Australian Government initiative designed to assist eligible home buyers in purchasing a home sooner by reducing the required deposit and eliminating the need for Lenders Mortgage Insurance (LMI). Administered by Housing Australia, the HGS encompasses three primary programs:

1. First Home Guarantee (FHBG): This program supports eligible home buyers, including first-time purchasers and those who haven't owned property in the past 10 years, to buy a home with a deposit as low as 5%. Housing Australia guarantees up to 15% of the property's value, allowing buyers to avoid LMI. For the 2024-25 financial year, 35,000 places are available under this guarantee. But it also means that you will reduce the interest paid on your loan and be able to access it at 80% Loan instead of 95% Loan, saving you thousands of dollars in interest repayments annually.

2. Family Home Guarantee (FHG): Aimed at eligible single parents or single legal guardians with at least one dependent child, this program enables the purchase of a home with a deposit as little as 2%. Housing Australia guarantees up to 18% of the property's value, facilitating homeownership without the need for LMI again reducing the interest rate you will pay for the loan, saving you thousands each year. There are 5,000 places available annually for this guarantee.

3. Regional First Home Buyer Guarantee (RFHBG): This initiative assists eligible regional home buyers in purchasing a home in their area with a deposit as low as 5%. Similar to the FHBG, Housing Australia guarantees up to 15% of the property's value, helping buyers avoid LMI and access as 80% LVR, again reducing the interest repayments annually. The Federal Government has allocated 10,000 places per financial year for this guarantee.

Eligibility Criteria:

• Citizenship and Residency: Applicants must be Australian citizens or permanent residents at the time of loan entry.

• Age: Applicants must be at least 18 years old.

• Income: For individuals, the annual taxable income must not exceed $125,000; for joint applicants, it must not exceed $200,000, as evidenced by the Notice of Assessment from the Australian Taxation Office.

• Property Ownership: Applicants should intend to occupy the purchased property as their principal residence.

• Property Price Caps: Maximum purchase price limits vary depending on the property's location.

To apply, interested individuals should contact participating lenders who can assess eligibility and guide them through the application process. A list of participating lenders and detailed information about the scheme can be found on the Housing Australia website.

It's important to note that while the HGS reduces the deposit requirement and eliminates LMI, buyers are still responsible for meeting loan repayments and other associated costs of homeownership.