Changes to the First Home Guarantee scheme announced by the government

As of July 1, 2023, the Australian government is expanding the eligibility criteria for the First Home Guarantee Scheme. The aim of these changes is to combat the ongoing housing affordability crisis and help more Australians enter the property market.

Previously, the First Home Guarantee and Regional First Home Buyer Guarantee schemes were restricted to married and single people, as well as those in de facto relationships. However, under the new changes, friends, siblings, and other family members will be able to jointly apply for these guarantees. This expansion of eligibility will enable more people to access vital assistance and purchase a home with as little as a 5% deposit, without paying lenders mortgage insurance.

The government is also relaxing restrictions on non-first homebuyers who have not owned a property in the past ten years, meaning they will be able to access these schemes. This is beneficial to individuals who have fallen out of home ownership due to financial issues or relationship breakdowns.

Permanent residents will also be able to access the schemes, in addition to Australian citizens. Previously, only Australian citizens were eligible to apply.

Under the First Home Guarantee and Regional First Home Buyer Guarantee schemes, the government acts as a guarantor on up to 15% of a loan. The expansion of these guarantees to include friends and family members will give more individuals access to the government's guarantee, which enables them to purchase a home with a smaller deposit.

The Family Home Guarantee will also undergo changes to expand the criteria for eligible borrowers beyond just single natural or adoptive parents with dependents. Under the new changes, the guarantee will become available to eligible borrowers who are single legal guardians of children, such as aunts, uncles, and grandparents.

Under the Family Home Guarantee, the government acts as a guarantor on up to 18% of a loan. This enables eligible home buyers to purchase a home with as little as a 2% deposit, without paying lenders mortgage insurance.

Why is the government making these changes to the First Home Guarantee Scheme?

The government is making these changes to reflect the changing makeup of Australian households. According to Housing Minister Julie Collins, the government is aware that friends and family members are already teaming up to secure their own place to call home. "Our actions will allow them to access vital assistance, just as couples have been able to previously," she said.

How many places are available under the First Home Guarantee Scheme?

It's important to note that every year, 35,000 First Home Guarantee places are made available. In addition, up until June 30, 2025, there will be 10,000 places available per year under the Regional First Home Buyer Guarantee and 5,000 places per year under the Family Home Guarantee.

If you're wondering whether you're eligible for one of the schemes, the federal government's National Housing Finance and Investment Corporation (NHFIC) website features a short questionnaire that can help you determine your eligibility.

In conclusion, the expansion of eligibility criteria for the First Home Guarantee Scheme will enable more Australians to access the housing market and secure their own place to call home. With the rising cost of living and ongoing housing affordability crisis, these changes are welcome news for many aspiring homeowners.