On 8 October, Premier Dan Andrews revealed a $500 million Victorian Homebuyer Fund (VHF) to help 3,000 aspiring home buyers purchase a property in the state.
The biggest benefit of the scheme is that you can buy a home in Victoria with a deposit as low as 5%. The Victorian government will contribute up to 25% of the purchase price and a participating lender will approve a home loan of up to 70% of the property value. You avoid paying Lenders Mortgage Insurance, which is normally applicable when you borrow more than 80% of the property value.
The fund is a shared equity scheme, since the Victorian Government will make a financial contribution to the purchase in exchange for a proportional interest or share of your property. The government will retain its stake in your property until you sell it or buy out the state’s share.
Who Is Eligible For The Homebuyer Fund?
You don’t have to be a first home buyer to qualify. The fund is available for those who want to become owner-occupiers of property in Victoria.
The eligibility criteria are as follows:
- You are an Australian citizen or permanent resident
- You are at least 18 years old at the time of settlement
- You have saved a deposit of at least 5%.
- Your gross annual income is $125,000 or less (for individuals) or $200,000 or less for joint applicants.
- You are buying the property as a principal place of residence.
- You must become a registered owner of the property you’re buying.
- Your property must remain insured. You will need to provide a certificate of currency during each annual review period.
The following are not eligible to apply for the fund:
- Organisations, companies, trusts or other entities
- If you are purchasing a property from a vendor who is a relative
- You own an interest in land at the time of purchase (including as a trustee of a trust or beneficiary under a trust)
- You are acting as trustee of a trust
- You are a shareholder in any corporation (other than a public company) that owns any land
Please note, you will need to meet the requirements of the lender as well.
How Much Can The Home Cost?
The maximum purchase price for Metropolitan Melbourne and Geelong is $950,000 and for regional locations, it is $600,000.
Where Are The Eligible Locations?
The property you buy must be in Metropolitan Melbourne, Geelong or an eligible regional location in Victoria. Here are some popular areas eligible for the scheme.
|Metropolitan Melbourne||Regional Victoria|
Ocean Grove – Barwon Heads
Here is a full list of eligible locations.
What Types Of Properties Are Eligible?
You can buy an existing property or a new property if a certificate of occupancy is issued before the date of the contract of sale.
The following types of properties are eligible:
- Vacant land is not eligible
- Off-the-plan purchases are not eligible
The property must be vacant when purchased or, if there is a lease, it must expire within 12 months of acquisition and tenants must vacate the property.
If you do not qualify for the fund, there are other low-deposit options available. Our mortgage brokers can help you choose the right option so you can buy your dream home sooner.
Besides the Victorian Homebuyer fund, there are other nationwide grants and schemes that you can qualify for.
Call us on 1300 889 743 or enquire online today.