Innovative shared equity loans for more first homebuyers
At the beginning of the year, the WA Government led the nation with the launch of First Start, a new shared equity home loan for first homebuyers.
Housing and Works Minister Michelle Roberts has said First Start had been nationally recognised for its innovation in addressing housing affordability.
In particular, First Start’s strength in targeting its support for low to moderate income earners and including a maximum property price had been applauded, as ensuring the scheme helped those most in need and did not drive up house prices.
Mrs Roberts said the scheme had been well received by the community and was helping many Western Australians realise their goal of home ownership.
“To date, through the First Start initiative, nearly 350 WA households - 279 families, 30 couples and 38 singles - are being given the opportunity to own their first home, with 194 First Start loans approved and 153 pre-approved,” she said.
“Through First Start, more than 900 Western Australians are leaving the rent treadmill behind and moving into their own home. That is especially important for families who want to settle their children into kindergarten and school and invest in a family asset.
“The launch of First Start broke new ground and I asked the department to closely monitor its implementation.”
A recent review of the scheme recommended an increase of the income limits.
“To ensure we meet our target of helping 3,000 families over the next three years to own their first home, the income eligibility levels for First Start will be raised from August 1 this year,” the Minister said
- $70,000 for families, up from $60,000;
- $60,000 for couples, up from $50,000; and
- $43,000 for singles, up from $35,000.
The new income limits will now make it easier for Western Australians to access First Start, the State Government’s shared equity home loan scheme for first homebuyers.
The Serrano family, currently renting in Balcatta, is an example of those applicants that are now eligible due to the new changes. Wally Serrano welcomed the changes to the First Start scheme.
“With these new changes, the dream of homeownership is now a reality for my family,” Mr Serrano said.
First Start provides up to 30 per cent equity for singles and couples, and up to 40 per cent equity for families, on homes valued up to $365,000.
Mrs Roberts said the review also recognised that existing debt levels were preventing some families from accessing First Start.
“To help these applicants to manage these debts, financial counselling services will now be made available through Keystart,” she said.
“Keystart officers will provide debt management tips to applicants and help them to access independent financial advice so that they can budget and reduce debt.
“Once their financial position improves, they will then be encouraged to reapply and hopefully become one of First Start’s 3,000 home owners.”
The Minister said the Key Start program was part of the Carpenter Government’s housing affordability strategy that included:
- $376million over the next four years, including $80million in 2007-08 to provide more social housing options, such as suitable accommodation for the growing seniors’ market, lodging house rooms and the community housing sector;
- $35million over four years to improve housing quality including maintenance and repairs in Aboriginal town-based communities;
- almost $6million in 2007-08 to expand the Bond Assistance Scheme to assist eligible lower income earners to access the private rental market;
- the State Government abolished stamp duty for all first home buyers of houses under $500,000; and
- $30million to speed up Government processes for granting approvals.
“Until now, bond assistance has generally been limited to people who are eligible for public rental accommodation, but there are people on slightly higher incomes who are now unable to afford the up-front costs of private rental,” Mrs Roberts said.
“This funding boost will enable bond loan limits to increase along with income eligibility limits, which will help more families and singles with entry costs into private rental accommodation.”