FHLDS scheme exhausted

All 5,000 places in the federal government’s First Home Loan Deposit Scheme (FHLDS) reserved for non-major lenders have now been exhausted, three months after they opened for submissions.

The FHLDS, administered by the National Housing Finance and Investment Corporation (NHFIC), aims to provide up to 10,000 first home buyers (FHBs) per financial year with access to housing finance with a deposit of at least 5 per cent, allowing FHBs to enter the property market earlier.

The government has agreed to guarantee the difference between the borrower’s 5 per cent deposit and the standard 20 per cent deposit required to take out a home loan without paying lender’s mortgage insurance (LMI).

A total of 27 lenders are currently on the FHLDS lender panel, with the majors – CBA and NAB – allocated 5,000 of the 10,000 loan spots guaranteed each year, with the other 25 non-major lenders set to split and write the other 5,000.

Participating lenders in the inaugural term of the scheme have now announced that all 5,000 places reserved for borrowers via non-major lenders have been exhausted (the 5,000 spaces allocated to the two major banks were reportedly filled earlier this year).

Another 10,000 new spots in the FHLDS will be opened and available when the scheme is reset on 1 July 2020, with further details on participating lenders and allocations yet to be released.

Under the scheme, borrowers who are offered a reserved place within the scheme have a 90-day pre-approval period in order to find and secure a property. However, due to COVID-19, an extension of a further 90 days was offered to participants of the scheme, giving them a total of 180 days to find and secure a property.

Despite the extension, participating lenders noted that not all borrowers who have been offered a place in the scheme will find and settle on a property within the designated time period, meaning those who have applied for the scheme via participating non-major lenders may still be able to secure a place prior to the next round of allocations being released in July.

As such, participating lender MyState Bank stated that applicants who have applied for but not yet been offered a place within the scheme via MyState will be placed in a “waiting queue” in case spots open up within the scheme.

Meanwhile, Teachers Mutual Bank Ltd, another non-major participating lender, stated that it “unfortunately will not be maintaining a ‘waiting list’ pending proposed future certificates being released” and will instead be prompting borrowers who have not secured a place in the scheme to re-apply in July.

Western Australia-based P&N Bank has stated that it will continue to accept scheme reservation requests despite the allocation being exhausted, with new requests to be “input into the scheme portal should a new place come available, or when new places are allocated” on 1 July.

[Related: CBA facilitates 1,000 purchases under FHB scheme]

Hannah Dowling is a journalist for mortgage business, the leading source of news, opinion and strategy for professionals working in the mortgage industry.

Prior to joining the team at Mortgage Business, Hannah worked as a content producer for a podcast catering to property investors. She also spent 6 years working in the real estate sector at a local agency. 

Hannah graduated from Macquarie University with a Bachelor of Media and Journalism. 

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