A message from the MFAA CEO, Mike Felton
Dear Member,
The National Housing Finance and Investment Corporation (NHFIC) has appointed the National Australia Bank (NAB) as the first participant on an initial panel of lenders to offer guarantees under the Australian Government’s new First Home Loan Deposit Scheme scheduled to commence 1 January 2020, with other participating lenders to be announced shortly. NHFIC has committed to announcing the full panel of lenders before 20 December 2019, at the latest.
The Scheme is designed to provide a guarantee that will allow eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5 per cent. It will support up to 10,000 loans each financial year and is subject to eligibility criteria in relation to income thresholds and property prices.
The MFAA has been actively involved in the consultation process, including being invited by the Minister for Housing to sit on the Treasury Reference Group for the Scheme, and we have also made a submission on the FHLDS to both Treasury and NHFIC. Through the consultation and our ongoing contact with NHFIC, we have stressed the importance of broker involvement in the Scheme and the critical role brokers play in driving competition and providing assistance to FHBs - which has been acknowledged.
NHFIC has, in consultation with the MFAA, been working to produce support resources and a dedicated information portal to assist brokers with borrower eligibility criteria and the process involved in securing the guarantee for broker customers. At present we are waiting on finalisation of the processes for the scheme from NHFIC at which point the broker resource materials will be completed and we will commence rolling out to our members. We are obviously aware of the tight deadlines, but it is out of our hands at present.
In addition to the NAB being appointed as the first participant, the NHFIC anticipates announcing other successful panel participants shortly, subject to the finalisation of contract negotiations.
NHFIC’s Investment Mandate permits up to two major lenders to be appointed to the panel and to receive up to 50 per cent of the 10,000 guarantees allocated per financial year. A number of non-major lenders are expected to be appointed to the panel in due course.
The MFAA will maintain ongoing engagement with the NHFIC as final decisions are made in the establishment of the Scheme and we will provide further updates as the Scheme’s parameters are resolved.
Please note - NHFIC is inviting brokers to subscribe directly to their newsletter updates at https://mailchi.mp/nhfic.gov.au/lendersubscribe/.
As new information about the Scheme is made available, alerts are sent out to subscribers on this dedicated database.
NHFIC has also published a property price threshold lookup tool enabling potential borrowers, lenders and brokers to quickly check applicable price thresholds under the Scheme for properties across the country. The tool is available at https://www.nhfic.gov.au/what-we-do/fhlds/eligibility/.
MFAA has been advised that NHFIC will shortly be launching an interactive, online borrower eligibility tool as well.
