NHFIC seeks more lenders for home-ownership schemes

The National Housing Finance and Investment Corporation (NHFIC) has commenced a request for proposal (RFP) process to add more mortgage providers to its non-major lender panel for the First Home Loan Deposit Scheme (FHLDS) and the Family Home Guarantee (FHG).

The body administers three schemes on behalf of the government: FHLDS, which aims to assist first home buyers to enter the property market; the New Home Guarantee, which helps eligible borrowers build or buy a new home; and the FHG, which helps single parents with at least one dependent child buy a family home.

The FHLDS and FHG allow first home buyers and single-parent families to purchase homes with a deposit as little as 5 per cent or 2 per cent respectively.

The programs are offered through a lender panel comprising two major lenders and 25 non-major lenders.

NHFIC had sought an independent review of the schemes’ performance and opportunities last year, which found it would be beneficial to consider expanding their lender panels.

The schemes were ruled as operating effectively, and that the existing lenders should remain – but the review had also concluded the FHLDS largely benefited first home buyers who would have been able to buy property within one to two years without assistance.

Non-major lenders have been invited to respond to the RFP and register their interest, with NHFIC reporting that it will consider how many lenders would complement and boost the existing panel.

The refreshed non-major lender panel is intended to come into effect from 1 July.

NHFIC stated that it is seeking to expand its lender panel to improve the accessibility and reach of the schemes, to support more eligible customers.

“We are expecting a lot of interest from lenders based on our ongoing dialogue with key stakeholders,” the body stated on its website.

The move has been made as extra places in the First Home Loan Deposit Scheme (FHLDS) have become available from Monday (31 January).

In December, the government decided to roll over 4,651 unused grants under the Home Guarantee Scheme from the 2021 financial year – giving first home buyers knocked around by COVID-19 disruptions a second chance.

Up to 2,236 of the additional places will be available to non-major lenders.

Great Southern Bank reported that it has a waiting list of customers seeking one of the newly available places in the scheme.

To date, it has helped 2,500 customers into a home through the FHLDS since January 2020 and a further 500 home buyers through the New Home Guarantee and the Family Home Guarantee.

Great Southern Bank chief executive Megan Keleher commented: “With house prices rising faster than incomes, saving the deposit for a home has become an increasing challenge for more and more first home buyers.”

As at October, the Family Home Guarantee, the FHLDS and New Home Guarantee had seen 52,888 people either purchase a home or reserve a place in one of the programs since 1 January 2020.

Government data from December had shown one in five FHLDS guarantees went to essential workers (around 6,000 in total), with around a third (34.8 per cent) going to nurses.

A little more than half (52 per cent) of FHLDS guarantees went to women, a greater proportion than the overall market average of 41 per cent.

More than half (58 per cent) of FHLDS recipients were aged under 30.

Home buyers were able to bring their home purchases forward by an average of four years for the FHLDS and 4.5 years for the New Home Guarantee.

The three guarantees under the Home Guarantee Scheme had been expanded in July last year, with 10,000 places added across each program.

The New Home Guarantee will cease on 30 June. Unless the government changes its final date, lenders will not be able to offer NHG-backed loans beyond June.

In December, NHFIC also teamed with Landcom, to explore potential housing supply solutions across NSW.

[Related: Hundreds take up SA state-backed home loan scheme]