As a single parent, purchasing a home can seem like an impossible dream. With the rising cost of living and the continued growth of property prices in Australia, it can be challenging to save up for a deposit and secure a mortgage. However, the Australian government has recently introduced the Family Home Guarantee, which aims to help single parents achieve their dream of homeownership. The Family Home Guarantee is a new initiative that was announced in the 2021-22 Federal Budget. It is designed to help single parents with dependent children purchase a home with a deposit as low as 2% - in other words, when purchasing a home of $500,000 an eligible applicant under this scheme may need as little as a $10,000 deposit! Additionally, unlike the First-Home Guarantee Scheme we spoke about in our last post, the Family Home Guarantee is available to both first-time buyers and those who have previously owned a home but are now single parents. The way the scheme works is that the Australian Government will guarantee up to 18% of the property purchase price, which means that applicants are able to avoid having to pay lenders' mortgage insurance (LMI). To be eligible for the Family Home Guarantee, single parents must meet certain criteria. They must have a taxable income of less than $125,000 per year and be Australian citizens (or, a permanent resident as of changes to the scheme from July 1 2023).
The home must also meet a property price cap, which varies by location. For reference, the current limits in WA are $600,000 for capital cities/regional centres, and $450,000 for the rest of WA.
FY 2023/24 Updates To The Family Home Guarantee Scheme
Single parents definition amended to include legal guardians, including Aunts, Uncles and Grandparents.
Expanded to include permanent residents (previously only for Australian Citizens)
Since it's inception, the Family Home Guarantee has created thousands of opportunities for single parents who have been struggling to save up for a deposit and secure a mortgage to get into the housing market. It has the potential to significantly fast-track their efforts of achieving their dream of homeownership. If you are a single parent who is interested in the Family Home Guarantee, it is worth speaking to the team at Neptune Finance Australia who can determine your eligibility, as well as helping you to navigate the application process.
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As Always - the information in this blog post is general only and shouldn't be constituted as advice. Your complete financial situation will need to be assessed before acceptance of any proposal or product.
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