Home Guarantee Scheme
What is the Home Guarantee Scheme?
The Home Guarantee Scheme is an Australian Government initiative that helps home buyers to buy a home sooner. Housing Australia administers the Home Guarantee Scheme which has already supported over 230,000 home buyers to realise their home ownership dreams.
The Home Guarantee Scheme supports home buyers who have saved a small deposit, and meet other eligibility criteria, to get a home loan to buy a home. There are three Guarantees available to suit different types of home buyers.
How does it work?
Home buyers usually need a deposit of 20% of the Property Value to get a home loan, and those with a smaller deposit may require Lenders Mortgage Insurance (LMI).
Under the Home Guarantee Scheme, Housing Australia provides a Guarantee to the lender, so home buyers only need a 2% or 5% deposit (depending on the type of Guarantee). This helps home buyers to buy a home sooner, with lower upfront costs.
Home buyers are responsible for meeting all costs and repayments for home loans associated with the Home Guarantee Scheme including but not limited to stamp duty, application fee and legal costs.
A Guarantee protects the Participating Lender, not the home buyer. It is not a cash payment to a home buyer, or a deposit for a home – home buyers will not receive any funds. It essentially means that if a home buyer defaults on their home loan, and selling the property doesn’t cover the outstanding amount they owe on their mortgage, then Housing Australia ‘guarantees’ to pay the lender a shortfall up to a pre-agreed limit.
For the First Home Guarantee and the Regional First Home Buyer Guarantee, the pre-agreed limit is up to 15% of the Property Value; and for the Family Home Guarantee it is up to 18%. The exact amount is set during the application process and depends on the deposit and the Property Value when purchased.
For the Home Guarantee Scheme, the Property Value is assessed by the Participating Lender, and it may be different to the purchase price. Home buyers need to meet Home Guarantee Scheme eligibility criteria and also the lender’s own lending criteria.
Eligibility
Who is eligible?
Home buyers need to meet a range of eligibility criteria to qualify for the Home Guarantee Scheme. These depend on the type of Guarantee, and include the following:
- Citizenship - be an Australian citizen(s) or permanent resident(s)
- Income - have taxable income at or below $125,000 (individual applicants) or $200,000 (joint applicants), shown on the ATO Notice of Assessment (NOA) for the previous financial year
- Deposit - minimum 5% (First Home Guarantee or Regional First Home Buyer Guarantee) or 2% (Family Home Guarantee) of the Property Value
- Property ownership - for the First Home Guarantee or Regional First Home Buyer Guarantee, must be a first home buyer or a home buyer who hasn’t owned a property in Australia in the last 10 years at the Home Loan Date*. For the Family Home Guarantee, they must not have any other property interest once their new home settles
- Owner-occupier - be buying or building a residential property to live in (investment properties are not eligible)
- Loan type - owner-occupier home loan with Principal and Interest repayments from a Participating Lender, up to 30 years (plus up to three years to build a new home)
- Applicant type - for the First Home Guarantee and Regional First Home Buyer Guarantee, home buyers can apply as an individual or jointly (maximum two applicants) with a partner, friend, or family member. For the Family Home Guarantee, they must be a single parent or single legal guardian of one or more dependent children
- Minimum age - home buyers must be at least 18 years old.
What type of home is supported?
The Home Guarantee Scheme supports new or existing residential properties in Australia at or below the property price cap for the location.
Which Guarantee Could Suit you?
To help you work out which Guarantee might suit you:
- take a look at the Home Guarantee Comparison Table that compares the key features of each Guarantee
- use the Eligibility Tool for a quick check of the main eligibility criteria. The tool is only a guide and your Participating Lender will confirm your eligibility.
Family Home Guarantee
You are a single parent or single legal guardian of one or more dependent children.
How to apply
Home buyers can apply through a Participating Lender authorised by Housing Australia to offer the Home Guarantee Scheme. These lenders will assess home buyer eligibility based on their lending criteria, guide home buyers through the application process and explain the documents and information to provide. They will submit an application to Housing Australia and inform the home buyer if they are eligible and if a place is available for them.
Home buyers can't apply directly to Housing Australia for a Guarantee - only through a Participating Lender as part of a home loan application.
How to apply
Home Buyer Declaration Form
Download the Home Buyer Declaration form here.
Important Information
Information on this page is general information about the Home Guarantee Scheme only. While Housing Australia has taken reasonable steps to ensure it is accurate, it does not provide any warranty that it is complete or that home buyers can rely on the information. Housing Australia does not accept any loss from reliance on the information. To apply for the Home Guarantee Scheme, home buyers will need to contact a Participating Lender who can assess their particular circumstances to determine whether they are eligible.