In this article you find:
- The First Home Loan Deposit Scheme (FHLDS)
- first-come, first-served
- Are you eligible?
- Get Your Paperwork In Order
- Apply Through A Broker
- Combine the FHLDS
- Discover more
- Related Articles
- Useful Guides
The First Home Loan Deposit Scheme (FHLDS) is a huge success. The launch in January 2020 saw all 10,000 places in Phase 1 filled before the end of the financial year. This lead to the launch of an additional 10,000 places on 1 July 2020 under Phase 2.
To date, phase 2 allocations are filling fast. Close to 50% of all available places for Phase 2 are already allocated. So, if you want to take advantage of the scheme and secure your home with a 5% deposit and no Lender Mortgage Insurance (LMI), you must apply soon.
All places are on a “first-come, first-served” basis. As yet, there has been no confirmation of Phase 3, so why wait? Follow our handy guide and secure your place while you still can.
Are you eligible?
Before wasting time and effort on an application, ensure you are eligible to apply. To secure your FHLDS place, you must pass the following checks:
- Deposit Check: You require a deposit equal to or greater than 5% of the prospective purchase price of your home. If you plan to purchase a $300,000 home, you will need a minimum deposit of $15,000. If your deposit is greater than 20% you are not eligible for the scheme.
- Income Check: To apply for the FHLDS your income cannot exceed the set thresholds. The taxable income threshold for singles is $125,000 and for couples is $200,000. If your earnings for the 2019/2020 financial year exceed these amounts, you cannot apply for the scheme.
- First Home Buyer Check: The FHLDS is for first home buyers only. If you, or your partner, have previously owned or part-owned property in Australia, you are not eligible for the scheme.
- Citizenship Check: The FHLDS is only open to Australian Citizens. Permanent or Temporary residents are not eligible to apply as an individual or as part of a couple. Only married couples or those in a de facto relationship can apply. Siblings or friends buying together are not eligible. All applicants must also be over 18 so you cannot apply for the scheme on behalf of your child.
- Primary Residence Check: You cannot use the scheme to purchase an investment property. Your intended property must be your future residence.
Get Your Paperwork In Order
If you pass all 5 checks, then it’s time to get your paperwork in order. To submit an application you will require the following:
- Full name and Date of Birth
- A copy of your 2019-2020 tax return assessment.
- Medicare card number (including your position on the card).
- An Australia passport or Australian Citizenship certificate.
- Bank Statements as proof of deposit.
- Home loan approval documentation.
- 2 recent payslips as proof of income.
- Signed First Home Buyer Declaration Form.
It’s important to note, your 2019/2020 Notice of Assessment is a key requirement for your application. Without it, you cannot apply and secure your place. If you have not already submitted your tax return, you must do so as soon as possible. Many people choose not to lodge their assessment until the October deadline, but if you wait until then, all places on the scheme might be gone.
Apply Through A Broker
Although the National Housing Finance and Investment Council (NHFIC) runs the FHLDS, you cannot apply to them directly. All applications must go through an accredited broker or one of the 27 approved lenders.
We encourage the use of a broker. It will give you the highest chance of success. A broker can help you to navigate the system and stack the odds in your favour.
All 27 lenders assess applicants using different criteria. If you are not familiar with their assessment criteria, your choice of lender could easily cause you to fail. You’ll waste valuable time and may even miss out on a place altogether!
Brokers are familiar will all 27 lenders and their assessment criteria. We are also privy to information not available to the general public. Did you know several key lenders have already filled their place quota and cannot submit further applications?
Saving money is one of the best reasons to use a broker. Every penny counts when you’re buying a house, so why spend more than you have to? Apply through a broker, and once your place is secure, we can get you the best mortgage rates on the market.
Call on us on 1300 295 814 to talk to one of our specialist mortgage brokers or complete a contact form online. Not only will we help you secure your place on the FHLDS, but we will also find you a home loan that meets your needs at the lowest rate possible.
Can I combine the FHLDS with other grants?
Yes, you can! There are currently several incentives that you can use along with the FHLDS.
- Home Builder Grant: If you meet the criteria for the Home Builder Grant (building a new home or purchasing off the plan) you can use it along with the FHLDS. You will need to sign a building contract before 31st December 2020 to access the Home Builder Grant. So, if you want to take advantage of both grants, time is of the essence.
- First Home Owners Grant: The First Home Owner Grant (FHOG) is a national scheme to offset the cost of GST when buying a home. The grant criteria differ between states and territories. However, eligible first-time buyers will receive a one-off lump sum payment.
- First Home Super Saver Scheme: The Super Saver Scheme gives first home buyers to access their voluntary superannuation contributions. They can withdraw up to $30,000 ($60,000 for a couple) to put towards a home deposit.
There may be further first-time buyer incentives on offer from your state or territory. Your broker can help you access the schemes you are eligible for and co-ordinate it with your FHLDS application.
Don’t Miss Out!
The FHLDS makes it easier to step onto the property ladder and buy your first home. Don’t waste this opportunity to secure your home with a deposit of just 5%. There’s no LMI requirement so you will save between $10,000 and $30,000 on your home purchase. The government won’t fund this offer forever. Talk to your broker and start your FHLDS application before it’s too late!