First Home Guarantee (FHBG) in Australia: A Pathway to Homeownership

 



First Home Guarantee (FHBG) in Australia: A Pathway to Homeownership

At Loans AU, we are excited to share information about the First Home Guarantee (FHBG), a key component of the Home Guarantee Scheme (HGS) established by the Australian Government. This initiative aims to support eligible home buyers in purchasing their homes more quickly. The scheme is administered by Housing Australia on behalf of the government.


What is the First Home Guarantee?

Under the FHBG, part of an eligible home buyer’s loan from a Participating Lender is guaranteed by Housing Australia. This allows home buyers to purchase a home with as little as a 5% deposit without needing to pay Lenders Mortgage Insurance (LMI). The guarantee can cover up to a maximum of 15% of the property's value, as assessed by the Participating Lender. It’s important to note that this guarantee is not a cash payment or deposit for a home loan. Eligibility criteria do apply.

From July 1, 2024, to June 30, 2025, there will be 35,000 FHBG places available.


Important Notice of Assessment (NOA) Information

Home buyers must provide the relevant Notice of Assessment (NOA) to their lender to validate eligibility for a HGS Guarantee:


  • For reservations made by a Participating Lender on or before June 30, 2024, the 2022-23 NOA will be required. A guarantee can still be issued, and settlement can occur after this date, provided all other criteria are met.
  • For reservations made on or after July 1, 2024, the 2023-24 NOA will be necessary. The Participating Lender can allow a 90-day expiry period while the NOA is obtained, but it must be provided before any guarantee is issued and settlement can take place.

Eligibility Criteria


To qualify for the FHBG, home buyers must meet the following requirements:

  • Apply as an individual or as two joint applicants.
  • Be an Australian citizen or permanent resident at the time of entering the loan agreement.
  • Be at least 18 years of age.
  • Have an annual income of up to $125,000 for individuals or $200,000 for joint applicants, as indicated on the NOA from the Australian Taxation Office.
  • Intend to occupy the purchased property as their primary residence.
  • Be first home buyers or former homeowners who haven't owned or had an interest in real property in Australia (including land only) in the past ten years.

You can access the Eligibility Tool, a short questionnaire designed to help home buyers determine which guarantees they might qualify for. 


Deposit Requirements

Home buyers looking to apply for the FHBG need to have a deposit ranging from 5% to 20% of the property’s value. The minimum deposit required is 5%, although Participating Lenders might require a higher deposit based on the individual's financial situation. 

It's advisable for home buyers to consult their Participating Lender to determine if their deposit qualifies as genuine savings according to lending criteria and the FHBG. Additionally, buyers should confirm with their lender whether any government grants received under other schemes can be counted as part of their genuine savings.


Property Types and Price Caps

Under the HGS, home buyers can purchase various types of residential properties, including:

  • Existing houses, townhouses, or apartments
  • House and land packages
  • Land with a separate contract to build a home
  • Off-the-plan apartments or townhouses

To check property price caps for different locations, you can use the Property Price Cap Tool. Specific timeframes and criteria apply depending on the property type, so be sure to consult with your Participating Lender for detailed information.


How to Apply

Applications for the HGS can only be made through a Participating Lender or their authorized representative (such as a mortgage broker). Housing Australia does not accept applications directly or provide personal financial advice. 

Home buyers should consider consulting a Participating Lender for independent financial and legal advice to ensure that a particular loan or property suits their personal circumstances and goals. Before finalizing a home loan agreement, it's recommended to discuss potential interest rate changes or fluctuations in house prices with a lender or broker.


Participating Lenders

Housing Australia has authorized a panel of Participating Lenders to offer the HGS to prospective home buyers.


Notice of Assessment (NOA) Explained

At Loans AU, we want to ensure you have a clear understanding of the Notice of Assessment (NOA) and its role in the Home Guarantee Scheme (HGS). 

The HGS includes an income test, which lenders evaluate using your NOA. After processing your tax return, the Australian Taxation Office (ATO) sends a Notice of Assessment statement directly to your myGov Inbox. 

For HGS reservations made between July 1, 2024, and June 30, 2025, the relevant NOA will be from the 2023-2024 financial year. Housing Australia recommends that applicants consult with their Participating Lender to assess the risks associated with signing a Contract of Sale before securing the latest NOA.

If you are unable to provide a Notice of Assessment—such as in cases where you have been working overseas—please reach out to your Participating Lender for guidance on alternative documentation that may be accepted as proof of your income.

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