From October 1, 2022, to June 20, 2025, 10,000 spaces will be made available annually under the Regional Home Buyer Guarantee. The government has moved the start date of the scheme from January 1, 2023, to an earlier date.
The news is great for Australians living in regional areas.
The founder, Otto Dargan, and Alan Hemmings, CEO of the Home Guarantee Scheme, praised the scheme as well as the accelerated timeline. Dargan said that the Home Guarantee Scheme may be able to expand further.
Dargan stated that the addition of regional buyers to the Home Guarantee Scheme was a great initiative by the government. It will help first-time home buyers enter the market. The scheme is designed to help first-time home buyers overcome the problem of saving while paying rent. In the future, these schemes will need to be extended, as not all people can get a place. This is the same challenge we faced in previous years with systems that had limited places.
Hemmings stated that a scheme like this would be especially welcome in the current market conditions.
Hemmings stated, “It’s great that the government decided to move the scheme forward at a time where affordability could be a problem.”
What is the Regional First Home Buyers Guarantee?
The Regional First Home Buyer Guarantee is an extension of the Home Guarantee scheme. You can purchase or build a home in a region without having to pay Lender’s mortgage insurance (LMI).
LMI usually applies when you borrow more than 80% of the value of your property. Under this scheme, however, you are allowed to borrow up to 95% of your property’s value. The government will also guarantee 15% of that loan.
Am I Eligible?
- You must be at least 18 and an Australian citizen.
- You cannot have owned a house before
- You have to buy outside a capital city area
- You must have lived in the area where the property is situated or adjacent areas for a minimum of 12 months.
- You must not earn more than $125,000 per year for singles or $200,000 per couple.
- The property price must not exceed the cap.
- The property must be purchased as your primary residence, not for investment.
What is a regional area?
National Housing Finance and Investment Corporation defines a region as “Statistical Area Level 4 2016 (ASGS SA4 2016) areas within a State, Territory or Norfolk Island that are not capital cities of the State or Territory. Also includes the Territories of Jervis Bay or Christmas Island and Cocos (Keeling) Islands as defined by the Australian Bureau of Statistics in July 2016. RFHBG excludes the ACT and larger capital cities of each State or Territory. The SA4s vary in size to reflect the population density and labor market.