Widening the Path to Affordable Housing: Updates to the Federal Home Guarantee Scheme | Clark Finance Group

Greensborough, Australia - June 16, 2023 / Clark Finance Group /

Empowering First Home Buyers: Leading Mortgage Broker Provides Key Insights

How amazing is it to see the Australian Government stepping in to take action and make positive changes to the Home Guarantee Scheme for First Home Buyers, especially considering the amount of information and planning that goes into such an initiative? Thisarticleshines a light on the subject, it brings hope to many ofuslooking tomoveforward in our quest for property ownership.

With clearly-defined objectives in mind, the decision to revise the available schemes aims to further support any person, including everyresidentandgrantrecipient, in achieving their dreams of homeownership or even investment property, based on their individual needs and the appropriateness of the programs for their age and lifestyle. The government's commitment tobuildingbetter opportunities is demonstrated by the expansion of the Home Guarantee Scheme and theexamplesmentioned below.

It's important to note the increasing number of loans and grants available, providing critical financial assistance to residents in the form of transfer duty concession, reduced purchase price, and purchase support through contract completion. In some cases, banks and other mortgage lenders have even collaborated with the government to provide better balance in home financing options. This page of our site will touch on the top states and their state government initiatives, with further detailed information available in our newsletter.

The Federal Governments initiative was implemented in January 2020 to help more Australians purchase their first homes. The policy is designed to help regular Aussies like you and me access affordable housing, taking into account factors such as stamp duty, land tax, property tax, and other fees associated with purchasing properties by the deadline of 30 June 2023. A calculator is provided for the buyers to determine the proportion of these costs in their purchases, as well as their potential credit score, payments, and interest rate to manage their debt. With the help of recent legislation updates, more people will be able to trust the government's service to find a suitable home, such as a townhouse or unit, for both personal use and business purposes. As the government moves to expand the program, the cost for state governments to implement these changes also increases.

In the recent budget, the Government announced the Home Guarantee Scheme is expanding its reach and effectiveness with exciting new measures. For example, they plan to include more options for residents, such as provisions for a spouse and higher savings rates on certain product offerings. Some of these measures will be shared through tips and advice for potential homeowners in our newsletter. All interested parties are encouraged to fill out an application form available on our site to benefit from the program.

• Expanding the eligibility criteria for borrowers so more people and families can now participate; it does not have to be an individual or couple (married/ defacto)
• expanding eligibility criteria for ownership and residency

What is the Home Guarantee Scheme?

The Australian Government introduced in 2019 and implemented the scheme in 2020 to assist more Australians in entering the property market. Initially, the scheme was known as the First Home Lending Deposit Scheme and was available for first-home buyers only and restricted to the capital/metro regions. Construction of new apartment buildings, townhouses, and single-family homes has also been encouraged through the scheme.

Due to its success, the government expanded the scheme under what is now known as the Home Guarantee Scheme, ensuring that every individual's unique circumstances are accounted for when putting this plan in place. Applicants can obtain a copy of the eligibility guidelines and program documents in an easy-to-use form to ensure they understand the terms and conditions of the contract.

The Home Guarantee Scheme has varied programs available; these include:

• First Home Guarantee
• Regional First Home Buyer Guarantee
• Family Home Guarantee

What Is the First Home Guarantee Scheme?

The First Home Guarantee (FHBG) is part of the Home Guarantee Scheme (HGS), an Australian Government initiative to support eligible first-home buyers to purchase a home sooner. Administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government, the program is gaining popularity among Australians, thanks to its comprehensive settlement services and assistance in navigating the real estate market. With the help of a knowledgeable real estate agent, who has a comprehensivelistofsellerdataandcontentat their disposal, finding a house in the ideal location and neighborhood becomes a much smoother experience. They can provide you witheverythingyou need to make an informed decision, including therightsandoptiondetails associated with each property.

Under the FHBG, eligible home buyers can purchase a home with as little as a 5% deposit without paying Lenders Mortgage Insurance. The home loan guarantee is for up to a maximum amount of 15% of the propertys value (as assessed by the Participating Lender). This guarantee is not a cash payment or a deposit for a home loan. With various houses on sale, you can find a lot that meets your needs and minimizes the overall risk associated with a home purchase.

The RFHBG is similar to the FHBG in terms of criteria but aims to support residents in regional areas and is limited to 10,000 places in FY2022- FY2023. The Australian Bureau of Statistics defines regional areas as an Australian Statistical Geography Standard 2016 Statistical Area Level 4 (ASGS SA4 2016). These areas are based on population density and labor markets and vary in size, reflecting these criteria. Each states more significant capital city areas, the Northern Territory and the Australian Capital Territory are excluded from the RFHBG.

The FHG aims to support eligible single parents with at least one dependent to buy a home. Prospective applicants can access the application form and go through the necessary steps to apply and benefit from the scheme. Whether the single parent is a first home buyer or a previous homeowner, they are suitable for the program. This dream of homeownership could be closer than ever, especially with the aid of participating lenders and potential stamp duty exemptions or concessions for owner-occupiers.

As they work through the home loan options, these buyers may find something suitable among the various available home loans, including those for investment properties and different types of mortgages. At this time, many people are looking for ways to secure financing and get the necessary funds in order, such as by managing credit cards, down payments, and credit scores. The assistance provided by the program may be just what they need to do so, offering diverse options to cater to a variety of customers' needs throughout their lives.

What Is the Regional First Home Guarantee Scheme (RFHBG)?

Under the FHG, part of an eligible home buyer's home loan from a Participating Lender is guaranteed by NHFIC. This enables a qualified home buyer to purchase a home with as little as a 2% deposit without paying Lenders' Mortgage Insurance or facing additional charges like lenders' mortgage insurance. The program paves the way for these homebuyers by saving them money on various fees, helping them research mortgage products that suit their situation, and even finding better mortgage rates. Moreover, different types of loans may be available depending on the home buyers' credit scores, offering a more comprehensive range of options. If you have questions about how it all works, don't hesitate to ask your real estate agent or a mortgage broker for assistance!

What Is the Family Home Guarantee Scheme (FHG)?

The Federal Government is widening its benefit to Australians to assist in buying a home, fostering a more inclusive and supportive housing market. The Home Guarantee Scheme is an example of their commitment to making homeownership more accessible, with its various programs designed to cater to different needs, including first-time homebuyers, regional residents, and single parents. Should you decide to take up the offer, remember to partner with an experienced real estate agent and mortgage broker to ensure the best possible outcome in your journey to owning a home.

This is because they understand that with rising living costs and interest rates in the country, our doubt of 'can I/we afford to buy a home?' has escalated. They know that having the right information and guidance can make all the difference in navigating the complex world of homeownership. Their statement on the matter highlights their commitment to addressing these concerns by providing easier access to the necessary credit and bank loans for various types of buildings, attracting investors, and helping sellers find the rightborrower. They aim to simplify the process of securing home loans, including understanding different loan types,down paymentrequirements, and more. It is also important to work with a mortgage broker who is familiar with the First Home Buyer Schemes.

These announcements will allow more Australians to utilize the programs - let's see what these changes mean for you, someone looking for a space to call their own, and any changes to your income! To stay updated on these announcements and more, remember to follow Clark Finance Group onLinkedIn.

Who is Eligible?

1. Couples are only eligible if married or in a de-facto relationship. Other people buying together, including siblings, parents/child, or friends, are not eligible.
2. The Australian Bureau of Statistics defines a regional area as an Australian Statistical Geography Standard 2016 Statistical Area Level 4 (ASGS SA4 2016). These areas are based on population density and labor markets and vary in size, reflecting these criteria. Each states greater capital city area, the Northern Territory, and the entire Australian Capital Territory are excluded from the RFHBG.
3. Australia Defence Force member applicants may be eligible for a partial exemption and should check with their Participating Lender if this applies.
4. Applicants can be either first-home buyers or previous owners who do not currently own a home. An applicant must not now have a freehold interest in real property in Australia, a lease of land in Australia, or a company title interest in land in Australia.
5. For a property to be eligible, it must be a residential property this term has a particular meaning under the Home Guarantee Scheme.

WIDENING THE BENEFITS TO HGS

Previously, these programs were only available to individuals (singles) and couples (married/defacto), you had to be an Australian Citizen, and you had to be a First Home Owner (never owned a property prior) with a property title in the applicant's name. This condition limited the opportunities for others who did not fit these strict criteria. To make it easier for applicants, informativemenuitems and helpfullinkshave now been added to the Clark Finance Group website, which is the go-to for First Home Buyers in Melbourne.

From 1st July 2023, the following changes will take effect:

First Home Buyers Grant and Regional First Home Buyers Guarantee:

Before, this program was only available to natural or legally adopted single parents with dependents and Australian citizens.

• Friends, siblings, and other family members will be able to apply for the FHBG/ RFHBG jointly.
• Permanent residents will be able to use FHBG/ RFHBG.
• Non-First Home Owners that have not owned a property in the past ten years will be able to use FHBG/RFHBG.

From 1st July 2023, the following changes will take effect:

Widening the criteria for the various programs under HGS means that you could buy a home sooner than you believed. Gone are the days of you worrying about not having enough deposits or managing other things like mortgage rates available to buy your house. Clark Finance Group, a leading mortgage broker in Melbourne, has helped numerous clients use the HGS to achieve home ownership nowinstead of "We bought a zoo," you could be saying "We bought a home" with the help of their expertise in navigating the complexities of contracts and requirements, as well as collaborating with the right agent.

• Single legal guardians of dependents, such as aunts, uncles, grandparents, etc. will now be able to apply for FHG
• Permanent residents will be able to use FHG

Take the next step toward your First Home

We understand that navigating the eligibility requirements can be complex, but worry not! Clark Finance Group is here to lend a helping hand with a team of experts well-versed in the Home Guarantee Scheme's details and can easily guide you through the process. With support and tailored financial solutions, to ensure that more families and individuals can access this incredible program and finally own their own homes.

The updates to the Home Guarantee Scheme are fantastic news for creating more affordable housing in Australia! The government has taken a significant step forward by expanding the eligibility criteria and making the application process simpler and more accessible, which also includes grants to assist with the fees and taxes associated with buying a property. If you are a First Home Buyer in Melbourne, then get in touch with Clark Finance Group, a trusted mortgage broker in Melbourne today.

Contact Information:

Clark Finance Group

1/85-87 Grimshaw St
Greensborough, VIC 3088
Australia

Vaughan Clark
+61 1300 366 670
https://clarkfinancegroup.com.au/