As part of the 2021-22 budget, the Australian Government announced a new scheme called the Family Home Guarantee.

Let’s find out what it is and whether you can benefit from it.

What is the Family Home Guarantee Scheme?

Under the scheme, a single parent with dependants can build a new home or purchase an existing one with as little as 2% of the property value, without paying Lenders Mortgage Insurance (LMI).

LMI is often charged on deposits of less than 20%. In this scheme, if the borrower pays a 2% deposit, the government will guarantee 18% of the loan, allowing the borrower to avoid paying LMI.

When will it be available?

The Family Home Guarantee is available over the next four financial years, from 1 July 2021.

There are 10,000 total places under the scheme – 2,500 in each of the next four years.

What are the eligibility criteria?

The Family Home Guarantee scheme is focused on single parents with dependants.

The government estimates that around 125,000 single parents are eligible, with 84% of them being single mothers.

Requirements Eligibility criteria
Income Your taxable income must not exceed $125,000
Child support payments are not included in the income cap.
Ownership The scheme is not limited to first-home buyers. You can be a previous home owner.
You can’t currently own a property.
Citizenship Applicants must be Australian citizens and 18 years or older
Permanent residents are not eligible.
Deposit A minimum deposit of 2% of the property value is required.
If the deposit is 20% or more, you will are not eligible for the scheme
Type of housing Build a new home OR Purchase an existing home

  • Existing house
  • Townhouse
  • Apartment
  • House and land package
  • Land and separate contract to build your home

As more information is announced, we will update the eligibility criteria.


What are the price caps for the scheme?

State/Territory Capital Cities and Regional Centres Rest of State
New South Wales (NSW) $700,000 $450,000
Victoria (VIC) $600,000 $375,000
Queensland (QLD) $475,000 $400,000
Western Australia (WA) $400,000 $300,000
South Australia (SA) $400,000 $250,000
Tasmania (TAS) $400,000 $300,000
Australian Capital Territory (ACT) $500,000 Same price cap throughout the ACT
Northern Territory (NT) $375,000 Same price cap throughout the NT

Where are the regional centres?

The regional centres apply to cities with a population over 250,000:

  • Newcastle & Lake Macquarie
  • Illawarra (Wollongong)
  • Geelong
  • Gold Coast
  • Sunshine Coast

What are the price caps for territories?

The price cap is the same as the rest of the state cap that applies to the closest state.

Territory Closest State Price cap
Jervis Bay Territory
Norfolk Island
New South Wales (NSW) $450,000
Christmas Island
Cocos (Keeling) Islands
Western Australia (WA) $300,000

How do I apply?

You will need to apply via the National Housing Finance and Investment Corporation (NHFIC).

If you’re successful, you will need to apply for a home loan with a participating lender.

There is no waiting list for the scheme.

Which lenders are participating?

NAB and CBA are the two major banks participating in the Family Home Guarantee Scheme.

As names of other banks and lenders become available, we will update this page.


FAQs: Family Home Guarantee

Is the scheme available for investment properties?

No. The Family Home Guarantee is not available for investment properties.

You must buy a residential property.

Can both parents apply for it?

Yes. Both parents (divorced or separated) can individually apply for the Family Home Guarantee.

Only one name of the single parent must be on the home loan and certificate of title.

However, if one parent has sole custody of the dependant, then he/she is not eligible for the scheme.


Should I apply for the scheme?

The Family Home Guarantee is aimed at single parents who want to buy a property sooner without paying LMI.

The biggest benefit is the thousands of dollars saved by avoiding LMI, since the government is acting as a guarantor and backing the borrower.

However, the scheme has some disadvantages:

  • You’ll be borrowing more; the bigger the loan, the more you’ll be affected when interest rates rise.
  • You will have a high loan-to-value ratio (LVR), which makes falling into negative equity (when your loan amount is higher than property value) more likely.
  • Repayments can be higher when you’re borrowing with a higher LVR.
  • Only a small fraction of single parents satisfy the strict eligibility criteria.
  • You will need to build a strong case as a single borrower. You should have a clean credit file with few or no blemishes and stable employment.
  • As you’re the sole applicant, you’re depending on a single income to service the loan. Having dependants affects your borrowing power.
  • Traditionally, lenders prefer single parents with mostly PAYG income. Payments from Centrelink might not be accepted.
  • There are other costs associated with buying property that the deposit does not cover, such as stamp duty and mortgage fees.

We’re here to help

Home Loan Experts can help you lodge an application for the Family Home Guarantee scheme.

We have other options available if you don’t qualify for the scheme:

Discuss your situation with our mortgage brokers today, and we’ll find you a home loan for your scenario. Call us on 1300 889 743 or fill in our free assessment form.

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