What Is The Shared Home Ownership Loan?

The Western Australia Shared Home Ownership is a shared equity scheme initiative that helps you buy your dream home sooner if you are struggling to save a large deposit to buy a home in WA. It was launched in 2011 by the state government of Western Australia. Keystart is a lending partner for this scheme.

How Does It Work?

The Housing Authority, through Keystart, funds up to 30% of a property’s purchase price. This means you will need a loan only for the remaining share. For example, If the authority funds you 25% of the purchase price under this scheme, Keystart will help you get a loan for the remaining 75%. In this way, you will be able to reduce your monthly loan repayments. The authority decides its funding amount based on your borrowing power. You also don’t have to wait to save a 20% deposit to get the loan. A deposit as little as 2% works under this scheme. The Housing Authority acts as a silent partner and co-owns the home with you. It owns a certain percentage of your home based on its funding amount. You need to repay the loan for your share, the costs of general maintenance and any other expenses associated with buying a home, such as insurance premiums and additional fees. Let’s look at an example: Henry is looking to purchase a property worth $300,000. He has qualified for a Shared Ownership Home Loan, and the Housing Authority has decided to purchase 25% of the property value ($75,000). His share of the property will be 75% ($225,000). Keystart will provide him the loan with a deposit of only 2% ($4,500). The total loan amount with Keystart will be $220,500 plus its fees.

Types Of WA Shared Home Ownership Loans

Flexible Shared Ownership

This loan allows you to increase your shares in the property by refinancing or purchasing more shares as long as your financial position allows. You can fully own the property with this option.

Fixed Shared Ownership

The share of the property the Housing Authority owns will always remain the same. You cannot increase your shares in the property by refinancing or purchasing further shares. You may sell it back to the authority if you wish. The benefit of this option is the value of your share increases if the property value increases. The increase in equity will help you purchase another home if you sell the property. But, you will never own your property outright with this loan. Note: Fixed shared ownership loans are currently applicable only for properties in specific locations within the Perth Metro Area. This helps the Housing Authority retain properties in key Perth locations to maintain housing affordability.

How Can I Apply For Shared Home Ownership Loans In WA?