The First Home Loan Deposit Scheme (FHLDS) has opened up the property market for thousands of first home buyers across the country. But with limited spots and added requirements for borrowers, it’s important you understand what you need to be eligible for the scheme.
At No1 Property Guide, Director Darren Walters has more than 20 years’ experience in property and finance and have helped thousands of renters get into the property market. Darren and his team of New Home Specialists can help you apply for grants and get you into your dream home sooner.
What is the First Home Loan Deposit Scheme?
The FHLDS is a government initiative designed to get first-time home buyers into a new home. It’s also intended to increase new builds across the country to assist with construction jobs after COVID-19.
The scheme enables first home buyers to borrow from select banks and lenders with as little as 5% for a deposit—without having to pay LMI. Assuming they meet strict lending criteria of course.
There are only 10,000 spots available each financial year for first home buyers, so you’ll need to get your application in quick if you’re interested. And there are also some terms and conditions of course.
Am I Eligible for the First Home Loan Deposit Scheme?
A lot of the requirements for the FHLDS are like other first home buyer schemes. However, if you’re not sure whether you’re eligible or not, here are the requirements:
- Must be an Australian citizen aged 18 years or older (permanent residents are not eligible).
- Singles with taxable income up to $125,000 per annum, or couples up to $200,000. Income will be assessed for the financial year prior to the financial year the loan is entered into.
- Couples must be married or in a de-facto relationship to be eligible. Parents, friends, or children are not eligible.
- Must have a deposit between 5% & 20% of the property’s value
- The loan must have scheduled repayments for the principal of the loan for the full period of the agreement.
- Applicants must intend to move into & live in the property as their principal place of residence.
- Must be first-time home buyers with no previous ownership or interest in properties. Whether as an individual or in a partnership (this includes residential strata & company title properties).
On top of these, there are also requirements for the types of properties eligible under the scheme. Valid property types include:
- An existing house, townhouse, or apartment
- A house & land package
- Land together with a separate contract to build a home
- An off-the-plan apartment or townhouse
All of the house and land packages at No1 Property Guide are eligible as part of the FHLDS. As long as they meet the price brackets below.
Finally, there are price thresholds in place for existing homes as well as new homes. These price thresholds will vary depending what state you’re in, as well as whether you’re looking to buy in a capital city, major regional centre, or a regional area.
As per the NHFIC government site, these are the current price caps for the 2021/2022 financial year:
|Region||FHLDS Price Cap||FHLDS New Homes Only Price Cap|
|NSW – Capital City||$800,000||$950,000|
|NSW – Regional Centre||$800,000||$950,000|
|NSW – Other||$600,000||$600,000|
|VIC – Capital City||$700,000||$850,000|
|VIC – Regional Centre||$700,000||$850,000|
|VIC – Other||$500,000||$550,000|
|QLD – Capital City||$600,000||$650,000|
|QLD – Regional Centre||$600,000||$650,000|
|QLD – Other||$450,000||$500,000|
|WA – Capital City||$500,000||$550,000|
|WA – Other||$400,000||$400,000|
|SA – Capital City||$500,000||$550,000|
|SA – Other||$350,000||$400,000|
|TAS – Capital City||$500,000||$550,000|
|TAS – Other||$400,000||$400,000|
|Jervis Bay Territory & Norfolk Island||$550,000||$600,000|
|Christmas Island & Cocos (Keeling) Island||$400,000||$400,000|
Not sure whether you’re in a regional centre or not? Head over to the NHFIC website, they have a convenient suburb/postcode checker you can use. Or speak to one of the New Homes Specialists at No1 Property Guide and we can walk you through the requirements and whether you might be eligible or not.
Does This Mean I Am Guaranteed a Loan?
Unfortunately, no. However, it does make it easier and means you won’t need to pay Lenders Mortgage Insurance (LMI). But home loans are still subject to the approval of banks or lenders. They can still deny you the loan for bad credit, poor rental history, or other reasons outside of the FHLDS.
If you’re not sure whether you’re eligible for a home loan, with or without FHLDS, fill in our pre-qualification form. Then, one of our New Home Specialists will get in touch to discuss your options and go over your borrowing capacity.
Are There Any Drawbacks to the FHLDS?
For many eligible first home buyers, there aren’t exactly a lot of drawbacks or any hidden caveats that will come back to bite you down the line. Of course, with a small deposit of only 5% the total principal of your home loan will be larger than if you had a 20% deposit. Which will mean many traditional lenders will charge more interest and have larger monthly repayments overall.
However, with house prices constantly on the rise, it’s getting close to impossible for new buyers to save that 20% deposit. Which is why, at No1 Property Guide, we specialise in providing no or low deposit options, at an affordable rate. Having additional funds from grants or your own savings only makes the costs even lower for you!
How Do I Apply for the First Home Loan Deposit Scheme?
If you think you’re eligible for the FHLDS, then contact our New Home Specialists to discuss what your options are. But remember, there’s a limited number of spots, so you need to get in quick.
What If I’m Not Eligible for the First Home Loan Deposit Scheme?
Even if you’re not eligible for the FHLDS, you still have options to get into the property market. Managing Director Darren Walters created No1 Property Guide to give low- and middle-income earners and first home buyers a better shot at getting their dream home using his no or low deposit new home system. Whether you’re eligible for the grant or not, have owned before or are looking to invest, there are options for you.
Contact our property specialists to discover your factual new home options. Or fill in your details to get pre-qualified for a no or low deposit new home today.