The dream of owning a home is now within reach for more aspiring homeowners, thanks to the newly introduced Home Guarantee Scheme (HGS). Created by the National Housing Finance and Investment Corporation (NHFIC), the NHFIC support to buy scheme aims to provide a stepping stone for individuals and families seeking assistance in purchasing their own property. The HGS takes over from the New Home Guarantee (NHG) that was running under the previous federal government, however, the main aims of making home loans accessible through low deposits remains the same.
The scheme’s aim is to remove one of the biggest barriers to home ownership, saving a full 20% deposit. This Australian Government initiative allows individuals to purchase a home with a reduced deposit, where the Australian Government will act as a guarantor, saving the individual from paying lenders mortgage insurance (LMI).

Read on for a breakdown of the key features and benefits of the NHFIC homeownership assistance scheme and how it can make home ownership a reality for many.

Affordable Deposits for Homeownership
One of the standout features of the Home Guarantee Scheme is its focus on reducing the barrier of entry to homeownership by offering affordable deposits. Under this scheme, eligible homebuyers can secure a property with a deposit as low as 2%, enabling them to enter the property market sooner and with greater ease. These reduced deposit requirements for home loans can be a game-changer for those struggling to save a significant sum upfront.

Government Guarantees for Homebuyers
The Home Guarantee Scheme is made possible by utilising government guarantees, providing additional security for both homebuyers and financial lenders. Through these guarantees, the HGS assists in bridging the deposit gap, instilling confidence in lenders to approve loans with smaller deposits. This government backing reduces the risk for lenders, thereby increasing accessibility to home loans for those who may have previously faced challenges in securing financing with a reduced deposit.

The Scheme includes three types of Guarantees:  

  • First Home Guarantee (FHBG) to support eligible first home buyers to buy a home with a deposit as little as 5%. There are 35,000 places are available for FY2023-24.
  • Regional First Home Buyer Guarantee (RFHBG) aimed at supporting eligible regional first home buyers to buy a home in a regional area, with a deposit as little as 5%. There are 10,000 places are available for FY2023-24.
  • Family Home Guarantee (FHG) to support eligible single parents and eligible single legal guardians of at least one dependent to buy a home with a deposit as little as 2%. There are 5,000 places are available for FY2023-24.

No Additional Costs Mortgage Insurance Costs
Unlike some other homeownership schemes, the Home Guarantee Scheme does not require homebuyers to pay for additional mortgage insurance, commonly known as Lenders Mortgage Insurance or LMI. This means that individuals and families can enjoy the benefits of reduced deposits without incurring additional expenses, making it an even more attractive option for aspiring homeowners.

Improved Housing Affordability through NHFIC
The overarching goal of the HGS is to improve housing affordability, particularly for first-time home buyers, an increasingly disadvantaged group as property prices continue to increase . By providing assistance in the form of affordable deposits and government guarantees, this scheme empowers individuals and families who may have otherwise struggled to enter the property market. The reduced financial burden allows them to redirect their resources toward mortgage repayments and establish a stable foundation for their future.

The Home Guarantee Scheme represents a significant step forward in addressing the challenges of homeownership and improving housing affordability for young and vulnerable individuals. With its focus on affordable deposits, government guarantees, and no additional costs, this scheme opens doors for many who have long aspired to own their own home and partake in the “Great Australian Dream”. By fostering accessibility and reducing barriers, the HGS empowers individuals and families to build a brighter future through homeownership.

If you’re looking to take the first step towards owning your dream home, the Home Guarantee Scheme has just opened up new spots for the 2023 – 2024 Financial Year. To find out more and check NHFIC Support to Buy eligibility, please visit NHFIC Support to Buy Scheme.