The First Home Loan Deposit Scheme (FHLDS) Explained

 In July last year, the Australian Government released the First Home Loan Deposit Scheme (FHLDS).
09-03-2020 |

In July last year, the Australian Government released the First Home Loan Deposit Scheme (FHLDS). The Scheme is intended to support eligible first home buyers fast track the purchase of a home. Since then, there has been a lot of discussion about the scheme, how it works, and how it can be accessed. We’ve answered some of the main questions about the scheme. If you have any others, feel free to reach out to us here.

What is the purpose of the FHLDS, and who is managing it?

In July 2018, the Government created the National Housing Finance and Investment Corporation (NHFIC) - a corporate Commonwealth entity which was tasked with improving housing affordability for Australians. Among other initiatives, the NHFIC then launched the FHLDS. What are the benefits of the Scheme? In order to be approved for a home loan, many lenders require applicants to save up to 20% of the purchase price as a deposit – or be subjected to additional costs and conditions such as Lenders Mortgage Insurance, or Loan Guarantors. Under the Scheme, first home buyers with less than 20% deposit are able to apply for assistance. If approved, the NHFIC will guarantee a portion of your loan – enabling you to secure your first home loan with a reduced deposit of as little as 5% of the property purchase price.

What are the restrictions?

  • Only loans through participating lenders are eligible. The FHLDS is not open to everyone, with the NHFIC maintaining a set criteria for applicant eligibility.
  • The NHFIC have released an online tool to check your eligibility, however, this is to be used as a guide only.
  • Property price thresholds ranging from $300,000 to $700,000 apply, and vary by location. To view the thresholds in your chosen suburb, use this tool Click Here.
  • Some restrictions apply to property types and settlement dates. View them by clicking here.
  • Once an application is submitted as a single or couple, it can only be changed by cancelling the application and beginning the process again. So think carefully before choosing how you wish to apply.

Is there a limit to the number of applicants who can receive the NHFIC guarantee?

Not all applicants who meet the criteria will be successful in receiving the guarantee. There are a limited number of places available, with 10,000 released since July 2019 (all of which are now exhausted) and another 10,000 places to be available in July 2020.

These places will be divided between:

  • Major lenders Commonwealth Bank of Australia and National Australia Bank (available from 1 January 2020).
  • Non-major lenders (available from 1 February 2020). What is the process to apply for the FHLDS?
  • In order to apply for a loan under the First Home Loan Deposit Scheme, there are a few steps to follow:

Check your eligibility.

  • Consider seeking additional financial and legal advice.
  • Contact a participating lender for further details about available places and relevant criteria.
  • Lodge your application through your chosen participating lender (not directly with the NHFIC).

Once you have taken these steps and secured your place, it’s time for the fun part – finding your dream property! Review our properties for sale, and Newcastle suburb profiles for more information, or give us a call to talk to our team of Street Property experts.