Home Guarantee expanded to enable more people to participate

The Albanese government has announced that it will be expanding the criteria under the Home Guarantee Scheme to enable more people to participate in the different guarantee schemes.

Eligibility criteria for all elements of the scheme — including the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee — will be expanded as the government continues to address Australia’s housing challenges.

Among the main changes are:

• An expansion to incorporate permanent residents into the guarantee schemes
• Broadened eligibility criteria for joint applications
• An expansion to allow more single guardians to use the Family Guarantee
• A change that enables those who have previously owned properties to join the scheme

Permanent residents to be eligible

While the three guarantees — the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee — are currently limited to Australian citizens, from the new financial year, all three guarantees will also become available to eligible borrowers who are Australian permanent residents.

Joint applicant eligibility expanded

From 1 July 2023, friends, siblings, and other family members will be eligible for joint applications under the First Home Guarantee and the Regional First Home Buyer Guarantee.

The shared equity schemes allow eligible first home buyers with a minimum of 5 per cent deposit to enter the property market and avoid paying the usual lenders mortgage insurance that applies to those with less than a 20 per cent deposit. Instead, the government guarantees the remainder of the missing deposit (up to 15 per cent).

Previously, these guarantees were only available to couples (those who are married or in a de facto relationship) or single applicants. However, the criteria for the First Home Guarantee and Regional First Home Buyer Guarantee will be expanded from the new financial year to enable couples who are not in a relationship — such as friends and family members — to join the scheme.

Single legal guardian expansion for Family Home Guarantee

Other changes announced by the federal government over the weekend include changing the Family Home Guarantee eligibility criteria.

The scheme currently supports eligible single parents with at least one dependent child to buy a home with as little as 2 per cent deposit without paying lenders mortgage insurance. The government guarantees a maximum amount of 18 per cent of the value of the property (as assessed by the participating lender).

From 1 July, the government will expand the eligibility criteria from single natural or adoptive parents with dependents to eligible borrowers who are single legal guardians of children such as aunts, uncles, and grandparents.

Previous home owners to be given access

The final change involves tweaking the guarantees to allow previous property owners to enter the scheme.

While the Home Guarantee Schemes are currently only available to first home buyers, the new financial year will enable former property owners to enter the scheme. However, this will be limited to those who haven’t owned a property in Australia in the last 10 years.

The change aims to support those who have “fallen out of home ownership”, for example, those who may have experienced financial crisis or relationship breakdown.

Speaking of the changes on Sunday (30 April), Julie Collins MP, the Minister for Housing, Minister for Homelessness, and Minister for Small Business, commented that the government was changing the scheme to “meet the times”.

She said: “We know friends and family members are already teaming up to secure their own place to call home.

“Our actions will allow them to access vital assistance, just as couples have been able to previously.” 

She added that the expansion to allow more legal guardians to access the Family Home Guarantee was a “sensible change” that would “help ensure more families have a safe and secure place to call home”.

These changes will build on last year’s increase in the number of places available and the establishment of Albanese government’s new Regional First Home Buyer Guarantee.

In total, 35,000 places are available per year across the First Home Guarantee, 10,000 places per year to 30 June 2025 under the Regional First Home Buyer Guarantee, and 5,000 places per year to 30 June 2025 under the Family Home Guarantee.

[Related: First 2,000 Aussies enter regional FHB scheme]