NSW expands Shared Equity Home Buyer Helper criteria

The NSW government’s multimillion-dollar Shared Equity Home Buyer Helper scheme — which will officially launch on 23 January 2023 — will now cover paramedics and early childhood educators as well as first home buyer teachers, police, nurses and midwives, some single parents and older single buyers.

The scheme, which passed into law last month, aims to help key workers purchase a property sooner by enabling them to secure a property with a minimum 2 per cent deposit without the “burden” of lenders mortgage insurance.

Under the program, the NSW government will contribute a share up to 40 per cent for a new property or 30 per cent of an existing property purchased by eligible buyers.

If the borrower sells the property, the proceeds of sale will be paid in the following order: participating lender, state government, home buyer. 

The government will be paid for its interest in the property and proportionally share in the gains or losses with the home buyer from the sale. 

Buyers will need to have a deposit of at least 2 per cent of the property price without paying the “burden” of lenders mortgage insurance (LMI) and without having to pay interest on the government’s equity share in a property.

Up to 3,000 spots will be available each year for two financial years to first home buyers who are earning under $90,000 (or $120,000 for couples) and are:

• Nurses
• Midwives
• Paramedics
• Teachers
• Early childhood educators
• Police officers
• Single parents of a dependent child or children
• Single people 50 years of age or above.

The maximum value of the property that can be purchased under the scheme is $950,000 in Sydney and regional centres including the Central Coast, Illawarra, Lake Macquarie, Newcastle and the North Coast of NSW, and $600,000 in other parts of NSW.

Participants must be 18 years or over and an Australian or New Zealand citizen, or a permanent Australian resident, must occupy the property as their principal place of residence and cannot own any other land or property.

Home buyers also must not be able to service the mortgage for the property purchased without the government contribution (but be able to service the mortgage with participating lenders with the government contribution).

Speaking of the expansion, Treasurer Matt Kean added: “The NSW government’s Shared Equity Home Buyer Helper will help make home ownership a reality for more people who would otherwise struggle to buy their own home.

“These key workers are the backbone of our communities and this initiative, which will enable them to buy a property with as little as a two per cent deposit, will help them find a place to call their own.”

Premier Dominic Perrottet noted that the expansion would help “more key workers own their first home”, along with lower-income single parents and single people over the age of 50.

“We’re removing the hurdles to home ownership with a lower upfront deposit, no lenders’ mortgage insurance and no interest on the government’s equity share,” the state Premier said.

A new online tool has been launched by the state government to help NSW residents identify if they are eligible to apply.

“To help secure your own home sooner, jump online to see if you’re eligible for the Shared Equity Home Buyer Helper,” Minister for Homes Anthony Roberts said.

“This could be your pathway to secure your own home valued up to $950,000 in Sydney and regional centres, and up to $600,000 in other parts of NSW.”

First participating lender confirmed

Bendigo and Adelaide Bank has now been announced as the initial participating lender for the scheme (while other lenders will have the opportunity to join the initiative in 2023).

Borrowers will need to apply to the lender directly, as the initiative is not accessible through the broker channel.

Bendigo and Adelaide Bank chief customer officer for consumer banking, Richard Fennell, commented: “Bendigo and Adelaide Bank’s purpose is to feed into the prosperity of our customers and the communities they live and work in, not off them, and we’re delighted to help first home buyers get that foot in the door in owning their first ever home.

“As one of Australia’s largest and most trusted banks, we support any initiative that helps Australians get ahead,” Mr Fennell said.

“We know home ownership is an important enabler of both financial and community security, which is why we are also proud lending partners of the Victorian Homebuyer Fund and Federal Home Guarantee Schemes,” Mr Fennell concluded.

The bank said it expects to see a “similar level of interest” in the scheme as other state government home buyer initiatives (such as the Victorian Homebuyer Fund and the federal home guarantee schemes).

[Related: Older, low-income households prefer alternative housing models: AHURI]