An extension has been granted for first-home buyers approved for a government loan scheme if they can’t find a property in 90 days, as COVID-19 lockdowns make finding a home more difficult.
The First Home Loan Deposit Scheme allows eligible first-home buyers to borrow from participating lenders with a 5 per cent deposit, with the federal government going guarantor for the remaining 15 per cent – effectively meaning buyers don’t need to take out lender’s mortgage insurance.
Only 10,000 places were available nationwide for the scheme, available from January this year, and successful applicants had to find a property within 90 days of approval. It was highly popular, with 3000 places taken in the first week and half of the year.
On Wednesday, the National Housing Finance and Investment Corporation (NHFIC) – the government body in charge of the scheme – gave participating lenders the ability to extend successful applicants places by a further 90 days, provided they were still eligible and satisfied the lender’s credit criteria.
“The option to extend the 90-day pre-approval period gives both scheme lenders and first-home buyers the flexibility and support to deal with the evolving COVID-19 situation,” NHFIC chief executive Nathan Dal Bon said.
Angus Sullivan, group executive for retail banking services from Commonwealth Bank – one of the two big banks offering loans under the scheme – said in a statement the extension would give the bank’s customers six months to find a property and “the peace of mind they need during this difficult period that their place under the scheme is safe”.
Buying and selling real estate has proved challenging since Prime Minister Scott Morrison announced last week that public open for inspections and auctions could no longer go ahead. Private property inspections can still be conducted, and sellers are starting to offer virtual inspections for buyers who are in self-isolation.
As of late March, more than 4700 of the 7661 first-home-buyers approved for the scheme were still yet to find a property.