The Family Home Guarantee Scheme, a federal government initiative, enables single parents to secure a home loan with a deposit as low as 2%, provided they can manage the ongoing loan repayments. This article is dedicated to exploring the application process of the Family Home Guarantee Scheme and the specific eligibility requirements that applicants must fulfil in detail.
We aim to offer comprehensive guidance to single parents, assisting them in understanding how they can benefit from this program and potentially make homeownership a more accessible and achievable goal.
Understanding the Basics of the Family Home Guarantee Scheme
The Family Home Guarantee, targeted at helping single parents with dependent children, facilitates home purchases with a minimal deposit of 2%, eliminating the need for Lender’s Mortgage Insurance. This scheme recognises single parents’ particular hurdles, who often struggle with more extensive deposits.
Initially, the program offered 10,000 spots over four years, averaging about 2,500 annually. This number was raised to 5,000 yearly in the Morrison Government’s 2022 budget. The subsequent Labor Government, taking office in July of the previous year, upheld this increase and raised the property value caps associated with the scheme. This scheme is a part of various initiatives to improve housing affordability, including the National Rental Affordability Scheme and the First Home Loan Deposit Scheme.
In a recent update, the Federal Government expanded the scheme’s scope by redefining ‘single parent’ to include legal guardians like grandparents, uncles, and aunts, thereby broadening its accessibility.
Family Home Guarantee Scheme Eligibility Criteria
Applicants must meet several specific criteria to be eligible for the Family Home Guarantee Scheme. Primarily, the scheme is designed for single parents with at least one dependent, where the single parent is responsible for the child’s day-to-day care, welfare, and development. This requirement ensures that the scheme targets those who are solely managing the upbringing of a child or children. Both single mothers and fathers can access this scheme, even in cases of shared custody, provided they individually meet the criteria.
Applicants must be Australian citizens or, from July 1, 2023, Australian Permanent Residents at least 18 years old. A crucial financial criterion is an annual taxable income of $125,000 or less, with child support payments excluded from this income calculation. To apply, one must provide a Notice of Assessment from the Australian Tax Office (ATO) for the previous financial year, confirming income details.
Another critical requirement is that the single parent must be the sole applicant listed on the loan and the certificate of title for the property. This stipulation ensures that the scheme benefits the intended individual. Additionally, applicants must intend to live in the property they wish to purchase, reinforcing the scheme’s focus on aiding genuine homeownership rather than investment opportunities.
The scheme does not restrict eligibility to first-time homebuyers. However, the applicant must not currently have a freehold interest in real property in Australia, a lease of land in Australia or a company title interest in land in Australia.
Finally, the Family Home Guarantee adheres to property price limits similar to those in the First Home Loan Deposit Scheme (FHLDS), which vary depending on the area. Applicants must check the property price caps specific to their region, ensuring the property they intend to buy falls within these limits. This adherence to price limits helps maintain the scheme’s focus on aiding those needing affordable housing options.
What Types of Properties are Eligible for the Family Home Guarantee?
The Family Home Guarantee requires the property to be residential, similar to the First Home Loan Deposit Scheme criteria. Typically, the following types of properties qualify:
- Pre-existing homes like houses, townhouses, or apartments
- Combined house and land packages
- Separate plots of land with an agreement to construct a house
- Apartments or townhouses yet to be built are known as off-the-plan properties.
Family Home Guarantee Scheme Price Cap For The Financial Year 2022-23
Below is the price cap of the Family Home Guarantee Scheme for the financial year 2022-23
| State/Territory | Capital city/regional centre | Rest of the State |
| NSW | $900,000 | $75,000 |
| VIC | $800,000 | $650,000 |
| QLD | $700,000 | $550,000 |
| WA | $600,000 | $450,000 |
| SA | $600,000 | $450,000 |
| TAS | $600,000 | $450,000 |
| ACT | $750,000 | N/A |
| NT | $600,000 | N/A |
| Jervis Bay Territory & Norfolk Island | $550,000 | N/A |
| Christmas Island & Cocos (Keeling) Island | $400,000 | N/A |
Note: To determine the maximum property prices for each area, use the Property Price Cap Tool.
Family Home Guarantee Scheme Application Process?
To apply for the Family Home Guarantee, interested applicants need to follow a specific process:
Application Through Authorized Lenders or Mortgage Brokers: Applicants must apply directly through an authorised lender or a mortgage broker that deals with Family Home Guarantee loans. This ensures that the application is processed by entities familiar with the specific requirements and nuances of the scheme.
Place Reservation: Given the limited number of places (5,000 per financial year), applicants must first secure a place reservation through their lender. This involves providing essential identification details like Medicare number, full name, and date of birth.
Income Verification: Applicants must provide a Notice of Assessment, which confirms that their income meets the scheme’s income test. For the financial year from July 1, 2022, to June 30, 2023, the relevant Notice of Assessment is for the 2021-2022 financial year. This document, sent annually to the applicant’s myGov Inbox after-tax return processing, is crucial for verifying income eligibility.
Selecting a Participating Lender: A list of 32 participating lenders, including NAB and Commonwealth Bank (two of the big four banks), along with 30 other non-bank lenders, is available for applicants to choose from. Choosing a lender that participates in the Family Home Guarantee scheme is essential.
Understanding Costs and Responsibilities: While there are no costs or repayments associated with the guarantee itself, eligible single parents are responsible for all costs and repayments of the home loan associated with the guarantee. The National Housing Finance and Investment Corporation (NHFIC) does not accept applications directly and does not maintain a waiting list for places,
Wrap Up!
The Family Home Guarantee Scheme is a key federal government initiative that supports single parents in obtaining a home loan with only a 2% deposit. This guide details the application steps, eligibility requirements, and qualifying property types, equipping you with vital information for this opportunity.
FinFix Broker Group, plays a crucial role in this process, offering expert guidance and simplifying the application procedure. Our dedicated team ensures that single parents are well-informed and supported throughout, making the journey towards homeownership more accessible and less daunting.
