Being a single mother can present itself with a range of challenges, with financial challenges being one of the major sources of stress. Additionally, the Australian Institute for Health and Welfare reports that single-parent households have increased in general, as has the proportion of single-parent households who rent housing rather than own their home.
What is the Family Home Guarantee?
To combat the rise in renting by single parents and instead encourage homeownership, the Australian Government has introduced the Family Home Guarantee, which supports single parents to purchase a family home.
The scheme, launched in July 2021, will help up to 10,000 single-parent families purchase a home of their own.
According to the CEO and founder of It’s Simple, Joseph Daoud, the scheme is a breakthrough for single mothers and single parents to help them buy a home and boost their long-term financial position.
“In usual circumstances, home buyers with less than a 20% deposit will be forced to pay lenders’ mortgage insurance. IT can make buying a home or property impossible for many single parents, particularly mothers who don’t have the available savings,” says Joseph, a financial expert dedicated to simplifying processes and explaining concepts jargon-free.
“Under the Family Home Guarantee, single parents can purchase a family home with as little as a 2% deposit as participating lenders partner with the Australian Federal Government who will guarantee up to 18% of the remaining deposit.”
“Whilst this forces the purchaser to borrow up to 98%, it allows them to purchase a property at a much lower savings point and avoid lenders mortgage insurance at the same time.”
Joseph also came to say that single mothers can now use this assistance in getting a home loan to build for their future rather than spending their already limited funds on rent each week.
Am I eligible?
You must be a single parent with at least one dependent child to be eligible for the scheme. A “dependant child” extends to any parent caring for a child living with a disability under the age of 22 years.
Additionally, the parent must not earn more than $125,000 per year, not inclusive of child support payments. It restricts the scheme to those who need it most.
Although you do not need to be a first home buyer to be eligible, you must intend to be the occupier of the home you are purchasing and must not currently own any property in Australia.
What type of property can I buy?
The property must be residential and extends to existing houses and land to build on.
“This scheme is great because of the flexibility in property options,” says Joseph. “You can choose to buy either an existing property, buy land and build a home from scratch, or buy an off the plan apartment.”
Depending on the house’s geographical location, there are caps on the purchase price.
How can I apply?
Single parents can apply through a participating lender, a list can be found here. There is no cost to apply.
To combat the rise in renting by single parents & instead encourage homeownership, the Australian Govt has introduced the Family Home Guarantee, which supports #singleparents to purchase a family home. 👩👧👦 #TheIndianSun #Propertyscape 🏡https://t.co/0S5bMxRGmz
— The Indian Sun (@The_Indian_Sun) April 4, 2022