More details released on the proposed HomesVic initiative
The Victorian Government has released some more details on the proposed HomesVic shared ownership scheme to commence on 01 Jan 2018.
Due to the rising rental costs in much of the country, it is getting increasingly difficult for many renters to save enough for a house deposit. Instead of saving, a lot of their income is going towards meeting rising rental costs. Therefore, the Victorian Government has taken steps by proposing a co-ownership scheme, whereby eligible first home buyers will be able to co-purchase a new or existing property with the Victorian Government. In this blog, we take a look at the HomesVic program in more detail.
WHAT ARE THE KEY FEATURES?
- The Victorian Government will offer to co-purchase properties with 400 first home buyers who meet the criteria to get a loan but don’t have a sufficient deposit because they may be renting at the moment
- It is available for Victorian first home buyers only
- It will be administered by the State Trustees of Victoria who provide clients with financial and legal assistance.
- HomesVic will take an equity share of up to 25% in the first home you purchase
- It will be applicable for the purchase of both Established and New homes
- It is only available for first home buyers with incomes of up to $75,000 for singles, or up to $95,000 for couples or families
- Eligible first home buyers will need to save a minimum deposit of 5%
HOW WILL IT WORK?
If you meet the above criteria the Government will provide up to 25 per cent equity. The homebuyer will be required to have a five percent deposit, and a mortgage from a private lender for the remainder of the property’s value. The Government’s equity contribution allows the home buyer to avoid paying Lenders Mortgage Insurance.
When the first home is sold, HomesVic will recover its share of the equity and reinvest it in other homes to further support more first home owners achieve their goal of home ownership.
WHO WILL IT BENEFIT MOST?
- Singles earning an income below $75,000pa with a low deposit saved
- Low-income couples earning below $95,000pa (combined) and currently struggling to save a deposit due to high rental costs
- Aspiring first home buyers looking to get into the property market
- Aspiring first home buyers who currently have a 5% deposit saved and want to avoid paying Lenders Mortgage Insurance, which is widely considered ‘dead money’ as it protects the lender rather than the borrower.
We are pleased to announce that we will be able to help you apply for the proposed shared equity scheme next year. Stay tuned for more updates on the Victorian HomesVic program as we get closer to 2018. For further information ion the HomesVic Program please visit the Victorian Government website
If you are interested in registering your interest for this program or if you are looking to buy your first home now please complete the enquiry form below.
First Home Buyers Australia