FAMILY HOME GUARANTEE

What is the Family Home Guarantee?

The Family Home Guarantee (FHG) is a program by the Australian Government, part of the Home Guarantee Scheme (HGS). It aims to help single parents or legal guardians with at least one dependent buy a home sooner. Housing Australia administers this initiative.

How Does the Family Home Guarantee Work?

Starting from July 1, 2023, to June 30, 2025, the FHG offers 5,000 guarantees each year. Eligible single parents or legal guardians with dependents can build a new home or purchase an existing one with just a 2% deposit, subject to lenders' credit criteria. This opportunity is available to both first-time and previous homeowners.

How the FHG Assists Home Buyers

The FHG allows qualified single parents to apply for a home loan through participating lenders. Housing Australia guarantees up to 18% of the property's value, provided the borrower has a minimum 2% deposit and meets other eligibility requirements. This support helps single parents enter or re-enter the housing market faster.

Costs and Obligations

There are no extra costs for the guarantee itself. However, recipients must handle all usual home loan costs, including mortgage repayments and associated fees. The FHG is strictly for purchasing a home to live in, not for investment properties.

Eligibility Criteria

To qualify for the FHG, applicants must:

  • Be a single parent or legal guardian with at least one dependent.

  • Be over 18 years old.

  • Be an Australian citizen or permanent resident.

  • Have a taxable income not exceeding $125,000 for the previous financial year (excluding child support).

  • Be the sole name on the loan and property title.

  • Ensure the loan term does not exceed 30 years.

  • Have a deposit of at least 2% but less than 20% of the property's value.

  • Intend to live in the property and not currently own any other property.

Property Requirements

Eligible properties include:

  • Existing houses, townhouses, or apartments.

  • House and land packages.

  • Land with a contract to build a home.

  • Off-the-plan apartments or townhouses.

The property's cost must stay within state and regional price caps, and applicants usually need to apply for a Principal and Interest loan unless it's a specific Construction Loan.

Legal and Financial Considerations

Applicants should consult a conveyancer for advice on purchasing land or building a home. They must sign a fixed-price building contract, with any changes potentially affecting their place in the scheme. Additionally, lenders might require Lenders Mortgage Insurance (LMI) or extra costs if contract changes increase expenses.

Loan Repayments

Regular repayments covering both the loan amount and interest are necessary throughout the loan term, with few exceptions for interest-only loans mainly used for construction. It's advisable to discuss potential impacts of interest rate changes with the lender or broker.

Property Price Thresholds

The property price limits for the FHG are the same as those for the First Home Guarantee.

Getting Help

To navigate the legal complexities and ensure you're well-prepared for the financial commitments, consult with a qualified conveyancing expert. They can guide you through the process and help mitigate risks.

By understanding and meeting these requirements, eligible single parents and legal guardians can take advantage of the Family Home Guarantee to secure a home for themselves and their dependents.

THE FIRST HOME BUYERS GUARANTEE SCHEME (FHBG) in Queensland

The First Home Buyers Guarantee Scheme (FHBG), is a government program that helps first-time homebuyers get into the property market.

WHO IS ELIGIBLE FOR THE FHBG QUEENSLAND?

When seeking approval for the FHBG in Queensland, a thorough evaluation is conducted, taking into account several key factors. These factors include an assessment of your income, the requested loan amount, and your financial history of home acquisitions.

QUEENSLAND FIRST HOME GUARANTEE SCHEME ELIGIBILITY TOOL

You can find an eligibility tool for the First Home Guarantee Scheme in Queensland here: Housing Australia

The eligibility criteria cover income, joint applications, prior ownership, citizenship, and owner-occupied status.

BRISBANE CONVEYANCERS HELP: WHAT IS LMI OR LENDERS MORTGAGE INSURANCE?

Lenders Mortgage Insurance, abbreviated as LMI, functions as a safeguard for lenders in the event that a borrower faces challenges in meeting their home loan repayment obligations. This insurance provision typically comes into play when the borrower seeks to finance more than 80% of the property's appraised value.

THE FIRST HOME LOAN DEPOSIT SCHEME IN QUEENSLAND

With the Australian Government 5% Deposit Scheme, that is now with expanded eligibility, you can own your first home sooner. The Scheme is for aspiring home buyers allows buyers to purchase a first home buyers with a minimum 5% deposit, or single parents or legal guardians with a minimum 2% deposit.

Learn more

THE FIRST HOME LOAN SUPER SAVER SCHEME

The FHSSS was first introduced in 2017 by the Australian government and allows prospective first home buyers to make voluntary contributions to their superannuation to later withdraw (alongwith any associated earnings) to use as a deposit to purchase or build their first home. 

What is the FHSSS?

The FHSSS legislation sought to make housing more affordable to first home buyers, retirees and the wider Australian market. Older Australians benefit from the FHSSS as they can contribute the proceeds of the sale of their home to superannuation. 

What are the changes to the FHSSS?

Following changes to the scheme first home buyers (FHBs) who are saving for a deposit using their superannuation will soon have more time to access their funds. In addition more updates have been made to make the scheme more flexible. 

The legislative changes generally apply retrospectively to FHSS Scheme applications made from 1 July 2018. “The changes will also apply to eligible individuals who applied from 1 July 2018, which will help Australians who engaged in the scheme in good faith, finally access the money they saved to purchase their first home.’

New legislation was passed in September 2023 that expands the time frame from 14 days to 90 days with which to request a release authority of savings in order to access funds to purchase their first home after they have entered into a contract.

Currently prospective FHBs can make personal contributions of up to $15,000 a year with $50,000 able to be withdrawn to use as a deposit towards a first home. 

The new changes permit candidates to amend and revoke their FHSSS applications before they receive funds.

 It also allows applicants to withdraw and reapply for the FHHSS Scheme releases in the future. 

The new bill will also make it possible for any FHSSS monies to be returned to superannuation funds if the amount is not yet released to the individual. Further clarifying ‘that FHSS Scheme amounts returned to superannuation funds are treated as funds’ non-assessable non-exempt income and do not count towards individuals’ contribution caps.’ Withdrawals are taxed at a marginal tax rate, less a 30 per cent offset.

For Australians who are downsizing the FHSSS allows people aged 65 and over to make additional non-concessional contributions of up to $300,000 into superannuation when they sell their home that they’ve held for at least 10 years This is able to be utilised by both members of a couple therefore up to $600,000 can be contributed.