Home Guarantee Scheme
The Home Guarantee Scheme (HGS) is an Australian Government initiative to support eligible home buyers to purchase a home sooner.
The Scheme is administered by Housing Australia on behalf of the Australian Government.
What is the Home Guarantee Scheme?
The HGS includes three types of Guarantees that your client may be eligible for:
- The First Home Guarantee (FHBG) – The purpose of the First Home Guarantee (FHBG) is to support eligible home buyers to enter the housing market sooner. To be eligible, home buyers applying for the FHBG must have a minimum of 5% deposit, and can include first home buyers or previous home owners who haven’t owned a property in the ten years prior to the date they execute their home loan.
Prior property ownership includes a freehold interest in real property in Australia (this includes owning land only), an interest in a lease of land in Australia with a term of 50 years or more, or a company title interest in land in Australia.
Australian Citizens or Australian permanent residents may apply.
Individual or joint applicants may apply for the First Home Guarantee (FHBG). Joint applicants may include partners, friends, siblings, and other family members. All applicants must occupy the property as their principal place of residence and it must remain their principal place of residence whilst under the Scheme.
35,000 places have been made available. - The Regional First Home Buyer Guarantee (RFHBG) - The purpose of the Regional First Home Buyer Guarantee (RFBG) is to help eligible regional home buyers to buy a home sooner.
To be eligible, home buyers applying for the RFHBG must have a minimum of 5% deposit. They must have lived (or at least one applicant if applying as joint applicants) in the regional area or adjacent regional area they are purchasing in for the preceding 12 month period to the date they execute the home loan agreement.
Australian citizens or Australian permanent residents may apply.
Employees required by their employer to relocate may be eligible for an exemption.
Individual or joint applicants may apply for the Regional First Home Buyer Guarantee. Joint applicants may include partners, friends, siblings, and other family members. All applicants must occupy the property as their principal place of residence and it must remain their principal place of residence whilst under the Scheme.
Home buyers not eligible for the RFHBG may be eligible for the FHBG or FHG. - The Family Home Guarantee (FHG) – The purpose of the FHG is to support eligible single parents and eligible single legal guardians to buy a home. An eligible single parent or eligible single legal guardian is not required to be a first home buyer, but must not own property at the time of entering into a loan under the FHG.
To be eligible, home buyers applying for the FHG must have a minimum deposit of 2% of the property value.
Australian citizens or Australian permanent residents may only apply.
Home buyers must be eligible single parents or eligible single legal guardians of at least one dependent.
5,000 places have been made available.
Your client’s reservation application for a HGS place will need to meet the eligibility criteria of the nominated Guarantee they are applying for under the Home Guarantee Scheme.
If your client is eligible and a place is available, they will be able to purchase a home and avoid paying any Lender’s Mortgage Insurance (LMI). The minimum deposit required is set out in the eligibility criteria for each Guarantee under the Scheme.
If your client has more than the minimum amount required, it is a Scheme requirement that they contribute the maximum amount of their savings.
What's the benefit for my customer?
With a Guarantee under the Home Guarantee Scheme your client could purchase or build a home with a reduced deposit and avoid paying any Lenders Mortgage Insurance (LMI) in conjunction with their loan.
Normally if your client was purchasing or building a home today, they would need to provide a deposit of at least 20% of the property’s value to avoid paying Lender’s Mortgage Insurance (LMI).
With a guarantee provided under the Home Guarantee Scheme they can provide a deposit of as little as 2% or 5% (dependent upon the guarantee type) and the Guarantee will mean that they can avoid the expense of paying LMI.
Is my customer eligible?
It is important to check all aspects of your clients’ eligibility for the Home Guarantee Scheme and determine the correct Guarantee applicable for them, as part of your conversation.
Check your clients eligibility here
To get started, some of the criteria includes
- All applicants for the First Home Guarantee (FHBG) or the Regional First Home Buyer Guarantee (RFHBG) must be a First Home Buyer or previous home owners who haven't owned a property in the ten years prior to the date they execute their home loan. There is a maximum of (two applicants/borrowers). Where an applicant is eligible for the RFHBG, they are not eligible for the FHBG. Therefore, if someone has lived in the region, or an adjacent regional area to the area they are purchasing in for the prior 12 months, they must be placed into the RFHBG.
Regional checker eligibility tool
- All applicants must be Australian citizens or Australian permanent residents, be aged 18 years of age and be able to provide the required supporting documents under the Scheme.
- All applicants must not be existing property owners (e.g. investment properties or vacant land awaiting construction) or have owned a property in the ten years prior to the date of executing their home loan documents.
- Applications must be for Owner Occupied homes with Principal & Interest repayments (exception for any construction periods).
- Applicants for the First Home Guarantee (FHBG) or Regional First Home Buyers Guarantee (RFHBG) must have accumulated a minimum deposit of 5% from genuine savings.
- In addition to a minimum of 5% deposit, applicants must also have available funds for purchase costs, including Stamp Duty and any other costs or fees required to complete the purchase transaction. Any further available funds, will be expected to be contributed towards the deposit.
- The proposed property being purchased must not exceed the applicable Property Price Caps for the area/region – see Property Price Thresholds.
- Applicants must have earned less than the below Income Thresholds in the preceding financial year. Your clients will need to provide a copy of their Notice of Assessment from the Australian Taxation Office (ATO) for the preceding financial year as part of the reservation process.
Income thresholds:
| Individuals | $125,000 |
|---|---|
| Joint applicants combined income | $200,000 |
Important note: In addition to Home Guarantee Scheme eligibility criteria, home loans applications need to also comply with standard Auswide Bank lending policy and eligibility criteria.
What is the required process?
Position your customer early so they are ready and clearly understand what they will need to provide to you so they have the best chance of being successful.
Submit Home Guarantee Scheme Reservation Application
- Familiarise yourself with the eligibility criteria and documentary requirements of the Scheme.
- Check your client’s eligibility by reviewing the information on the Housing Australia website Support to buy a home - Housing Australia.
- Complete Home Guarantee Scheme Reservation Application Form (ensure correct legal names are captured in full as it will affect your customer’s reservation).
- Complete the Home Guarantee Scheme Checklist on page 2 of the application form to determine the correct Scheme to apply for.
- You must provide your client with a copy of the ‘Australian Government – Scheme Information Guide’ relevant to the nominated guarantee being applied for, prior to them signing the Home Buyer Declaration Form.
- Ensure the citizenship documents are certified by a 'qualified person'. Refer to 'Who can certify Citizenship documents'.
- Ensure you have ALL the specified supporting documents required to support the Reservation Application BEFORE lodging the reservation application.
- Complete the Broker Declaration section and have your clients’ sign the privacy consent section of the application. All signatures must be ‘wet’ signatures. Electronic or digital signatures are not acceptable.
- Email the Reservation Application form and ALL supporting documents required for reservation to HGSbrokers@auswidebank.com.au
- Note: Do not submit a Reservation Application without ALL required documentation as it will be rejected and a new reservation application will need to be submitted.
- Upon receiving your Reservation Application with all the required supporting documentation our HGS team will review the application request and all of the documents provided to ensure applicants meet all of the required eligibility criteria for the nominated Guarantee.
Scheme Allocation Reserved
- When the reservation application has been processed and applicant confirmed as eligible the HGS team will process a Scheme Place Reservation request for your client(s) in the Home Guarantee Scheme Portal.
- The Auswide HGS team will return a Reservation Confirmation ID to you via email. This will confirm your client(s) Scheme place has been reserved. Please remember that Scheme places are limited and a reservation is not guaranteed.
Pre-Approval & Full Home Loan Applications
- Scheme reservations expire after 14 calendar days.
- When a reservation confirmation is issued a loan application must be submitted in Apply Online by the Broker quoting the reservation number and decisioned by Auswide Bank as conditionally approved or Pre-Approved within the 14 day timeframe to secure your clients’ place for an additional period of time.
- Obtaining a Pre-Approval will extend your client’s reservation period by another 90 days. Conditional Approvals can extend a reservation, where a Contract has been entered into, by another 30 days.
- The loan application must be identified as a HGS application on the Loan Summary Form with the Reservation ID specified.
- The AOL application must show that the application is a Government Guarantee Scheme application by answering ‘yes’ and completing the required details.
- Full home loan applications or conversion from Pre-approval to full approval, require all other supporting documents as stipulated in the Supporting Documents Checklist to also be submitted at time of lodgement, due to strict timeframes. Refer to the Broker Information Guides for more details or your BRM.
Select Property & Obtain Full Approval
- If your client(s) hasn’t yet contracted to purchase an existing property, or entered into a contract to purchase land and build, this will be required prior being able to provide a final assessment.
- Any outstanding conditions on the customer’s application will need to be met. Auswide Bank will need a Valuation of the property to proceed with a final assessment. We recommend that you order an upfront valuation with Auswide Bank via the Property Hub. Upfront Valuations will not be available for construction applications as they are not an option for Upfront Valuations at this time.
- Final assessment will be completed on the application and then the loan application will be decisioned.
- Following final approval of your clients’ Home Loan application Auswide Bank will request the Guarantee Certificate to be issued to secure your clients’ Scheme place.
- On receipt of the Guarantee Certificate Auswide Bank will issue loan agreements to your client(s) for execution and return in preparation for settlement.
Settlement & Move In
- When the executed loan agreement is returned to Auswide Bank’s settlement agents (MSA) they will co-ordinate settlement with your clients’ solicitors.
- Once settlement has been completed your client is free to move into their first home!
- If your clients’ have purchased land and are building their new home, once the land purchase has settled then the construction phase of the loan will commence.
- The builder will be paid at the completion of each stage of the house as set out in the clients’ fixed price building contract.
- When the final payment is made handover will be completed and your clients’ will be able to move into a brand new home.
- Settlement must occur within 100 days of the Guarantee Certificate being issued.
Important Documents
Scheme Information Guides & Fact Sheets
Home Guarantee Scheme - Regional First Home Buyer Guarantee Information Guide
FROM 01 JUL 2024
Home Guarantee Scheme - Regional First Home Buyer Guarantee Fact Sheet
FROM 01 JUL 2024
Home Guarantee Scheme - First Home Guarantee Information Guide
FROM 01 JUL 2024
Home Guarantee Scheme - First Home Guarantee Fact Sheet
FROM 01 JUL 2024
Home Guarantee Scheme - Family Home Guarantee Scheme Information Guide
FROM 01 JUL 2024
Home Guarantee Scheme - Family Home Guarantee Factsheet
FROM 01 JUL 2024
More Information
Auswide Bank Broker Website: www.auswidebrokers.com.au
Housing Australia Website: www.housingaustralia.gov.au/support-to-buy-a-home/
General Enquiries: brokers@auswidebank.com.au
Any other enquiries: Please contact your dedicated Broker Relationship Manager.
Important things you should know
Auswide Bank Ltd ABN 40 087 652 060, Australian Credit Licence 239686 is the credit issuer. Approval is subject to meeting our credit assessment criteria. Terms, conditions, fees and charges apply. Prior to entering into a credit contract with us you should read our Credit Guide.
Auswide Bank is a panel lender for the Home Guarantee Scheme. Eligibility criteria applies. Once the Scheme places for non-major panel lenders has been utilised (or taken up) for each financial year, standard lending approval criteria, including the need for LMI where appropriate, will apply.