Home Guarantee places ‘still available’

The National Housing Finance and Investment Corporation (NHFIC) has announced it has helped 100,000 Australians purchase or build their own home since the schemes commenced over three years ago.

The federal government’s Home Guarantee Schemes, spearheaded by the previous government and supported by the current Labor government, aim to support 50,000 people a year into home ownership.

The places for the three schemes — include 35,000 for the First Home Guarantee, 5,000 for the Regional First Home Buyer Guarantee, and 10,000 for the Family Home Guarantee — were increased to meet growing demand.

The program supports eligible home buyers, including first home buyers, single parents, and regional Australians, to purchase their home sooner, by enabling eligible buyers to enter the property market with a minimum deposit of 5 per cent, or 2 per cent for Family Guarantees, while avoiding the need for lenders mortgage insurance (LMI).

The NHFIC has announced that regional areas have particularly benefited from the program, with 34,000 regional Australians having received support across the guarantees, since inception.

However, in April 2023, the government announced 2,997 households had taken advantage of the Regional First Home Buyer scheme, which marked its first six months of the scheme opening in October 2022, indicating places were left available.

Minister for Housing Julie Collins said helping more Australians into home ownership was the government’s focus.

“We’re bringing together all levels of government to tackle housing issues from planning to rental reforms and making sure housing and homelessness services providers are listened to as we plan for the future,” Ms Collins said.

“But most importantly, we’re helping those who need it most. We’re delivering the largest increase in rent assistance in more than 30 years, as well as a $1.6 billion one-year extension of the National Housing and Homelessness Agreement with states and territories.”

However, while the Home Guarantee Program offers a promising pathway to home ownership, she said “places are still available” before the end of the financial year.

Ongoing interest rate rises by the Reserve Bank of Australia have impacted Australian borrowers, leading banks to introduce stricter serviceability assessments.

This, combined with heightened scrutiny of applications, has hindered some borrowers from accessing the available schemes.

Mortgage brokers, who play a critical role in originating loans under the program, have voiced concerns about these serviceability constraints on access to the guarantees.

Recognising the shortfall in applications this year, the government has boosted its eligibility criteria to give more people access to the scheme.

Starting from 1 July 2023, friends, siblings, and other family members will also be eligible for joint applications under the First Home Guarantee and the Regional First Home Buyer Guarantee.

This move aims to provide greater flexibility and inclusivity within the program.

Of the 100,000 Australians who have benefited from the schemes, one in five were key workers, including over 6,700 teachers, 5,000 nurses, and almost 3,500 social workers.

Making this possible, the NHFIC 2022 Trends and Insights Report revealed mortgage brokers have emerged as crucial facilitators, dominating the origination channel of loans under the program.

The report revealed mortgage brokers involvement has steadily increased, with brokers originating around 46 per cent of guarantees in 2019–20, rising to approximately 72 per cent in 2021–22.

[Related: Budget slammed for not addressing the housing crisis]