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The South Australian state government has published new data on its Starter Loan Scheme.
Administered through state-owned lender HomeStart Finance, the Starter Loan provides interest-free and repayment-free loans of up to $10,000 for five years to borrowers, to cover the upfront costs associated with buying or building a home, such as stamp duty, fees, and charges.
The new data from the South Australian government has shown 217 Starter Loans have been approved in the FY21-22, following on from 378 in the FY20-21 year and 110 in FY20.
The Starter Loan Scheme began in September 2019 and the total value of Starter Loans to date is $6.4 million, with the total value of new homes built or purchased with the assistance of the loan totalling $201 million.
Of the buyers who used the Starter Loan, 70 per cent had been in private rentals and a small number had been Housing SA tenants.
Out of the total 705 loans since it began, the majority were used in Southern Adelaide (79), followed by Port Adelaide (52), North-East (44), Hills (33), South (21) and Central (17).
In the regions, loans had also been used by people living in the Fleurieu/Kangaroo Island (26), Gawler/Barossa (44), Lower North (8), Murray Bridge (19) and Murray Mallee (4), among other places.
South Australian Minister for Human Services, Michelle Lensink, commented there had been a rise in uptake during the pandemic, as the government had broadened the eligibility criteria to include moderate-income earners.
Applicants must have a net household income of less than $65,000 for singles and $90,000 for couples and the property must be owner-occupied.
They must also have enough funds to cover the deposit, but not enough for remaining upfront costs such as stamp duty.
HomeStart Finance chief executive Andrew Mills added: “The Starter Loan remains a great opportunity for low-moderate income households looking to enjoy the benefits of home ownership.
“The government had committed a further $10 million to the Starter Loan initiative in the 2021-22 mid-year budget review.”
The scheme operates in addition to the state government’s $15,000 First Home Owner Grant, for buyers who build new homes.
South Australia’s government recently launched its Housing Construction Stimulus Package, which has aimed to keep up residential building activity after the end of the federal government’s HomeBuilder program.
The package included the extension of the Starter Loan Scheme, with 1,000 more loans available. Half of the additional loans have been limited to new home construction.
[Related: Aus median house price surpasses $1m]
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