The Family Home Guarantee – 2% deposits for single parents
Update: From 1 July 2022, 40,000 new places in the Home Guarantee Scheme became available for the financial year, made up of 35,000 places in the First Home Guarantee and 5,000 places in the Family Home Guarantee.
The Family Home Guarantee can be used to purchase a new or existing home with a deposit of as little as 2%. Picture: Getty.
The Family Home Guarantee, which was first announced in the 2021 federal budget, allows eligible single parents to buy a property with a deposit as low as 2%, without having to pay lenders mortgage insurance. Under the scheme, 5,000 places will be available per year until June 2025.
Here’s what you need to know.
How the Family Home Guarantee works
Under the Family Home Guarantee, single parents could build a new home or purchase an existing home with a deposit of as little as 2%, plus costs, with the government guaranteeing up to 18% of the value of the property.
Usually, buyers who haven’t saved up a full 20% deposit, on top of other upfront costs, will generally need to pay for lenders mortgage insurance.
This could help single parents to enter, or re-enter, the housing market much sooner and save thousands of dollars in LMI costs.
How it could help a single parent family
To explain how it may help, let’s look at an example:
A single parent hoping to purchase a $460,000 home would typically need to save a 20% deposit of $92,000 to avoid paying lenders mortgage insurance.
Under the Family Home Guarantee, and on the success of their application with a lender, they could secure the property with a 2% deposit of $9200 – on top of other upfront costs, such as stamp duty and conveyancing fees.
Who is eligible?
Single parents with at least one dependent child can access the scheme regardless of whether they’ve owned a property before or not, however there are restrictions on income and property value.
You may be eligible for the Family Home Guarantee if:
- You’re an Australian citizen who is at least 18 years of age.
- You’re a single parent with at least one dependent child.
- You didn’t earn more than $125,000 in the previous financial year, excluding child support payments.
- You have a deposit of at least 2% to put towards the property, on top of other upfront costs such as stamp duty.
What types of properties are eligible?
The Family Home Guarantee is limited to residential properties, and you must live in the property you intend to purchase. The scheme cannot be used for an investment property.
Eligible properties under the Family Home Guarantee
They must be residential properties, including:
- An existing house, townhouse or apartment
- A house and land package
- Land and a separate contract to build a home
- An off-the-plan apartment or townhouse.
Price caps for the Family Home Guarantee in each state and territory
There are also price thresholds for properties that can be purchased under the Family Home Guarantee, which vary in each state and territory, and whether you live in a metropolitan or regional area.
These caps are reviewed annually by the National Housing Finance and Investment Corporation (NHFIC) with the most recent thresholds set in July 2022.
| State or Territory | Capital city and regional centres | Rest of state |
| NSW | $900,000 | $750,000 |
| Victoria | $800,000 | $650,000 |
| Queensland | $700,000 | $550,000 |
| Western Australia | $600,000 | $450,000 |
| South Australia | $600,000 | $450,000 |
| Tasmania | $600,000 | $450,000 |
| Australian Capital Territory | $750,000 (all areas) | – |
| Northern Territory | $600,000 (all areas) | – |
Price caps effective from 1 July 2022.
You can search the property price threshold for a suburb or postcode on the NHFIC website.
How to apply for the Family Home Guarantee
Applications for the Family Home Guarantee can be made through participating lenders or mortgage brokers.
A full list of participating lenders can be found on the National Housing Finance and Investment Corporation’s website.
There are no costs or repayments associated with the guarantee, however eligible single parents are responsible for meeting all costs and repayments for the home loan associated with the guarantee.