Being a single parent and buying a home can be a challenging experience, but resources are available to make it easier. Single parents often face financial constraints, and buying a house may seem unattainable. However, with the help of government schemes, single parents can now purchase their dream family home with minimum deposit requirements.
One of the most helpful schemes available to single parents is the Family Home Guarantee Scheme. This scheme allows single parents with at least one dependent child to buy or build a home with a deposit as low as 2% without paying Lenders Mortgage Insurance. Buyers with less than a 20% deposit must pay LMI, which can be a significant expense, especially for single parents.
Family Home Guarantee Scheme Explained
The Family Home Guarantee is a component of the Home Guarantee Scheme, which is an initiative of the Australian Government designed to help eligible single parents with at least one dependent child buy a home sooner.
The National Housing Finance and Investment Corporation administers the program on behalf of the government. The FHG program aims to assist eligible single parents, whether they are first-time homebuyers or previous homeowners, to purchase a home.
From July 1, 2022 to June 30, 2023, 5,000 FHG places will be available to eligible single parents with at least one dependent child. Under the FHG program, NHFIC guarantees part of the eligible homebuyer’s home loan from a Participating Lender. This allows an eligible homebuyer to buy a home with as little as a 2% deposit without having to pay Lenders Mortgage Insurance.
The guarantee for the home loan is up to a maximum of 18% of the property’s assessed value, as determined by the Participating Lender. It is important to note that this Guarantee is not a cash payment or a deposit for a home loan.
Eligibility Criteria for FHG Scheme
- Must be a single parent with at least one dependent child
- Must be an Australian citizen and at least 18 years old
- Must intend to live in the property
- Annual taxable income of the previous financial year should be $125,000 or less (excluding any child support)
Eligible Properties
Existing House, Townhouse or Apartment
Under the FHG, home buyers can purchase an existing house, townhouse or apartment. The property price cap for this category varies based on the location.
House and Land Package
A house and land package involves purchasing both the land and a separate contract to build a home. To be eligible for FHG, the eligible building contract must be signed by March 31, 2022, and construction must commence within 6 months of the contract date. The property price cap for this category also varies based on the location.
Land and Separate Contract to Build a Home
Under the FHG, home buyers can also purchase land and a separate contract to build a home. To be eligible, the eligible building contract must be signed by March 31, 2022, and construction must commence within 6 months of the contract date. The property price cap for this category varies based on the location.
Off-the-Plan Apartment or Townhouse
Off-the-plan apartment or townhouse purchases are also eligible for the FHG. The property price cap for this category varies based on the location. The contract of sale must be signed by March 31, 2022, and construction must be completed within 3 years of the contract date.
Specific timeframes and criteria apply to each property type. The contract of sale and (if applicable) eligible building contract may have to be executed by specific dates. Make sure to check the FHG guidelines and eligibility criteria for the property type you are interested in purchasing.
Buying a home as a single parent is possible, thanks to government schemes like the Family Home Guarantee Scheme. With careful planning and support from relevant organizations, single parents can achieve their dream of owning a home for their family.
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