The journey to homeownership can be challenging, especially for single parents or legal guardians with dependents. Recognising this, the Australian government has introduced the Family Home Guarantee to provide crucial support and expedite the path to owning a home.
The Family Home Guarantee is designed to offer support to eligible single parents or legal guardians with at least one dependent, facilitating a quicker path to homeownership. A minimal 2% deposit is required for this scheme, with the government acting as a guarantor for the remainder. This arrangement ensures the avoidance of Lenders’ Mortgage Insurance. It’s important to note that if you are not a First Home Buyer, you will need to provide a 2% deposit along with the requisite stamp duty for your purchase.
Eligibility Criteria
To qualify for the Family Home Guarantee, individuals must meet specific criteria, ensuring that the support reaches those who need it the most. Eligibility requirements include:
- Applying as an individual.
- Being an Australian Citizen or Permanent Resident.
- Being at least 18 years of age.
- Being a single parent or legal guardian of at least one dependent.
- Purchasing a principal place of residence.
- Not currently owning any type of property.
- Earning less than $125,000 based on the last year’s Notice of Assessment.
It’s important to note that individuals who are separated but not divorced are not considered single for the purpose of this scheme.
Property Price Caps
The Family Home Guarantee takes into account regional variations in property prices, establishing specific price caps for different states and territories. The caps are as follows:
State | Regional Centre | All other Regional Areas |
|---|---|---|
NSW | $900,000 | $750,000 |
VIC | $800,000 | $650,000 |
QLD | $700,000 | $550,000 |
WA | $450,000 | |
SA | $450,000 | |
TAS | $450,000 |
Territory | Regional Area |
|---|---|
ACT | Not applicable |
NT Regional | $600,000 |
Jervis Bay Territory & Norfolk Island | $550,000 |
Christmas Island and Cocos (Keeling) Islands | $400,000 |
Benefits of the Family Home Guarantee Scheme
Avoidance of Lenders Mortgage Insurance Costs: One of the significant advantages of the Family Home Guarantee is the potential savings on Lenders Mortgage Insurance. Eligible participants can save substantial amounts, making homeownership more financially viable.
Potential for Lower Interest Rates: Qualifying for the scheme may open doors to lower interest rates, further easing the financial burden associated with homeownership.
Accelerated Homeownership: The primary goal of the Family Home Guarantee is to expedite the process of acquiring a family home. By requiring only a minimal 2% deposit and having the government act as a guarantor for the remainder, the scheme facilitates a quicker transition to homeownership.
The Family Home Guarantee is a commendable initiative by the Australian government, providing much-needed support for single parents and legal guardians. By offering financial assistance, reducing upfront costs and expediting the home-buying process, this scheme plays a crucial role in making homeownership a reality for many who may have otherwise found it challenging to enter the property market.
Aspiring homeowners should carefully review the eligibility criteria and property price caps to take full advantage of the benefits offered by the Family Home Guarantee.
For more information reach out to You First Finance today.
