Victorian first home buyers can now register for shared ownership scheme
From Friday the 10th of November 2017, first home buyers are able to express their interest in being a part of HomesVic — a shared equity scheme that will see the Government provide up to 25% of the initial price of a buyer’s first home.
Earlier this year, when the policy was announced in the Victorian State Budget, we published an article outlining what the Victorian HomesVic program involves. Click here to refresh your memory with the announcement.
By taking a stake in the first home, the Government will help by giving eligible first home buyers the start they need – enabling them to enter the market earlier by reducing the amount of money and home loan you will need for your first home. This scheme is expected to be particularly effective in Melbourne & the surrounding areas where housing affordability continues to worsen as the house price boom continues in these areas.
Applications will officially open in February 2018 and the pilot scheme will begin in early 2018 (where some eligible first home buyers will be able to purchase) – with an initial allocation of $50 million over two years. The pilot scheme will initially be available for up to 400 first home buyers who meet the eligibility criteria.
Who is the Scheme suitable for?
The HomesVic shared ownership scheme is not for all Victorian first home buyers as it is targetted towards low income earning singles and couples/families. The scheme requires first home buyers to have a minimum of 5% deposit to contribute to their first home.
The scheme will significantly benefit the first home buyers with the following characteristics:
- 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 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.
Greater priority will be given to homes in areas where there is a high demand for housing and good access to employment, public transport and other services. Furthermore, selected areas in metropolitan Melbourne and certain towns/regional centres will be announced in early 2018, prior to applications opening up in February 2018.
The key to your first home may be closer than you think thanks to the Victorian Government
How can you register your interest?
Prior to the launch of the scheme, you should assess your situation against the eligibility criteria. The eligibility criteria is as follows:
- Be an Australian citizen or have permanent-resident status
- Have been residing in Victoria for the past two years
- Be aged 18 years or older
- Be a ‘natural person’ (that is, not an organisation, company, trust, or other body)
- Not be related to, or associated with, the vendor of the property being purchased
- Have gross taxable income (including salary sacrifice) of no more than $75,000 per annum for an individual; or
- Have gross taxable income (including salary sacrifice) of no more than $95,000 for multiple person households.
- Be acquiring the dwelling as their primary place of residence
- Not currently own, or have previously owned (and not have a spouse or domestic partner who currently owns, or has previously owned) a residential property, in whole or in part
- The first home must be a standard residential property (e.g. a house, townhouse, unit or apartment), and
- The first home must either be an existing home or a new home construction for which completion is planned to occur within three months of settlement
- The applicant(s) must not have existing loans or debts (other than HECS or HELP) in excess of $10,000
- The applicant must secure a home loan from a panel financial institution. As a first step, the applicant must secure in-principle or conditional loan approval (the accepted list of banks will be available in Jan 2018)
How can FHBA help you utilise the benefits of HomesVic?
To participate in the scheme, the applicant must secure a home loan from a financial institution authorised by the Victorian Government. As a first step, the applicant must secure a pre-approval or a conditional approval. The Government will not assess the application before this has occurred.
A list of panel financial institutions will be provided by the Victorian Government in January 2018, before the launch of the scheme. Please check in with FHBA Mortgages in January as we will let you know exactly which lenders will be taking part in the HomesVic scheme. As we assist first home buyers throughout the entire journey of buying your first home, we can also assist you in finding the dream new or established home!
FHOG eligible brand new home
We have access to a range of brand new property opportunities for aspiring first home buyers looking to buy in Victoria and surrounding areas (all with FHOG eligibility + the FHBA 50 Rebate!). Be sure to complete the form at the bottom of this page if you are interested and want to know more about the exciting apartments, townhouses and house & land packages we have access to.
FHBA assists first home buyers looking to buy an established home – regardless of budget, property type, or property location, we will not rest until you have successfully settled on a property you have chosen & you have comfortably moved into your first home.
To view the full eligibility criteria and more information on HomesVic, please visit the Victorian Government website.
If you are looking for assistance in relation to the HomesVic program, please complete the form below to speak to an FHBA Coach:
First Home Buyers Australia