Australian Home Guarantee Scheme explained.

In response to the ongoing housing crisis, the federal government has taken significant steps to alleviate the situation by broadening the eligibility criteria for the Home Guarantee Scheme (HGS). This expansion aims to make homeownership more attainable for a greater number of Australians.

Originally recognized as the First Home Loan Deposit Scheme (FHLDS), the Home Guarantee Scheme was introduced in 2020 as a government-backed initiative to facilitate easier entry into the property market for first-time homebuyers. The scheme allows eligible buyers to contribute as little as 5% (and a mere 2% for the Family Home Guarantee) of the home's purchase price, while the government provides a guarantee to the lender for up to 15% of the property's value.

This could benefit potential buyers by exempting them from the significant expense of Lenders Mortgage Insurance (LMI). This reduction in upfront costs enables first-time homebuyers to secure a property with a more manageable down payment.

There is the First Home Guarantee, Family Home Guarantee and Regional First Home Buyer Guarantee. Let’s look into some of the differences of each scheme-

The Regional First Home Buyer Guarantee is an initiative from the Australian Government designed to support eligible regional home buyers purchase a home in regional areas.

Housing Australia provides a guarantee for eligible home buyers on low and middle incomes so that they can purchase a home with a deposit of as little as five percent.

The Australian Government has made 10,000 Regional First Home Buyer Guarantee places available for the current financial year through a panel of participating lenders.

Prior to applying for any of the Home Guarantees, it's recommended that potential homebuyers engage in a discussion about their unique financial situation with a lender involved in the scheme. For more information regarding the Home Guarantee Scheme please visit the Housing Australia Website.