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The First Home Loan Deposit Scheme (FHLDS) is an Australian Government initiative to support eligible first home buyers purchase their first home sooner.

Generally, first home buyers with less than 20 per cent (20%) of the deposit need to pay lenders mortgage insurance.

Under the Scheme, eligible first home buyers can purchase a modest home with a deposit with as little as 5 per cent (5%) (lenders criteria also apply).

This is because National Housing Finance and Investment Corporation (NHFIC) guarantees to a participating lender up to 15 percent (15%) of the value of the property purchased, which is financed by an eligible first home buyer’s home loan.

Currently, there are 27 participating lenders across Australia offering places under the First Home Loan Deposit Scheme, including the National Australia Bank and Commonwealth Bank of Australia.

Who can apply for the FHLDS?

Both singles and couples are able to apply for the FHLDS.

However, loan arrangements made with family and/or friends, with more than two borrowers or instances where the other borrower is not your spouse or de facto partner, are not eligible for the Scheme.

Any person considering to apply for the FHLDS should consider the following factors before applying for the Scheme:

An Income Test

The following income thresholds apply in relation to eligibility for the Scheme:

  • singles – your taxable income for the previous financial year must not be more than $125,000.

  • couples – your combined taxable income for the previous financial year must not be more than $200,000.

The income test is assessed by your lender.

For Scheme reservations made up to 30 June 2020, the relevant Notice of Assessment (NOA) from the Australian Taxation Office is for the 2018-19 income year.

However, if you hold that reservation for too long (e.g. more than 90 days), your relevant NOA may end up being the 2019-20 income year.

For Scheme reservations made from 1 July 2020 to 30 June 2021, the relevant NOA is the 2019-20 income year.      

A Priority Property Ownership Test

To satisfy the prior property ownership test, you must not have ever owned any of the following:

  • a freehold interest in real property in Australia

  • an interest in a lease of land in Australia with a term of 50 years (or more), or

  • a company title interest in land in Australia.

These tests apply for property interests in all states and territories of Australia, regardless of whether the property was a commercial property, an investment or owner-occupied, and whether it was ever lived in.

They also apply if any of the interests listed above have been held by you on your own or together with someone else – for example, where you held an interest in property with a former spouse or de facto partner.

For your home loan to be covered by the Scheme, you will need to make a statutory declaration that confirms you have not held any interests of this kind.

This declaration is made under the First Home Buyer Declaration provided to you by your participating lender.

Citizenship Test

The Scheme is only open to current Australian citizens.

To satisfy the citizenship test you will need to be an Australian citizen at the time you enter into a home loan with your participating lender.

If a couple applies for the Scheme, they must both be Australian citizens.

Permanent residents, who are not Australian citizens, are not eligible for the Scheme.

A Minimum Age Test

To apply for the Scheme you must be 18 years of age or over to be eligible for the Scheme.

A Deposit Requirements

The Scheme is to assist singles and couples (together) who have at least five per cent (5%) of the value of an eligible property saved as a deposit.

The five per cent (5%) must be made up of genuine savings.

If you have twenty percent (20%) or more of the deposit saved, then your home loan will not be covered by the Scheme.

Your Participating Lender will be able to tell you if you satisfy this requirement. You should also confirm with your Participating Lender whether any cash grants under other Australian Government, State or Territory schemes or programs you may receive can be considered as part of
genuine savings by that Participating Lender.

An Owner-Occupier Requirement

Investment properties are not covered by the Scheme.

To meet the owner-occupier requirement, you will need to:

  • move into the property within six months from the date of settlement or, if later, the date an occupancy certificate is issued, and

  • continue to live in that property for so long as your home loan has a guarantee under the Scheme.

If you don’t live in your property or move out of the property at a later time, your home load will cease to be guaranteed by the Scheme.

Members of the Australian Defence Force (ADF) are still required to be owner-occupiers under FHLDS.

However, if they are unable to meet the owner-occupier requirement because of their duties, they may still be eligible for the Scheme if at the time of entering into their loan agreement, they intend to live in the property.

What are some Important Timeframes?

For all types of Eligible Properties, a contract of sale and/or an eligible building contract must be entered into prior to the expiry of the 90 day pre-approval period.

What are the Relevant Property Price Caps?

Overview of Property Price Caps Across New South Wales

Region ID Region FHLDS Price Cap ($AUD) FHLDS (New Homes)only Price Cap ($AUD)
1 NSW – capital city*  $700,000.00 $950,000.00
2 NSW – regional centre (New Castle and Lake Macquarie) $700,000.00 $950,000.00
3 NSW – regional centre (Illawarra) $700,000.00 $950,000.00
4 NSW – other  $450,000.00 $600,000.00

*Please note that different price caps apply to different States and Territories.

*Capital city price caps apply to large regional centres with a population over 250,000 (the Gold Coast, Newcastle and Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong), recognising that dwellings in large regional centres tend to be significantly more expensive than other regional areas).

How can you apply for the Scheme?

All applications for the First Home Loan Deposit Scheme need to be made directly to one of the participating lenders or their authorised representatives (i.e. a mortgage broker).

NHFIC does not accept applications directly.

First home buyers (and those advising a first home buyer) are encouraged to consult with a participating lender and seek their own independent financial and legal advice on how to structure their loan arrangements in a way that suits their own personal circumstances.

Chemonica Niranjan


Lisa Cox


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