Family Home Guarantee 2% Deposit Guide

The Family Home Guarantee: Single Parents Buying with a 2% Deposit

For single parents balancing childcare and living expenses, accumulating a traditional 20% home loan deposit can feel mathematically impossible. recognising this challenge, the Australian Federal Government enacted the Family Home Guarantee (FHG), administered through Housing Australia. Under this statutory scheme, eligible single parents and legal guardians can purchase a family home with as little as a 2% cash deposit without paying expensive Lenders Mortgage Insurance (LMI).

How the Scheme Operates: The Government Guarantee

In standard Australian banking, borrowing more than 80% of a property's value triggers mandatory LMI, which can add $20,000 to $40,000 to your loan. Under the Family Home Guarantee:

• The Federal Government guarantees up to 18% of the property's purchase price directly to your participating commercial lender.
• The single parent contributes a minimum cash deposit of just 2%.
• Lenders Mortgage Insurance is completely waived ($0 LMI).
• The buyer secures standard commercial home loan interest rates rather than high-risk interest surcharges.

Eligibility Criteria for Single Parents

To qualify for the Family Home Guarantee, applicants must meet specific statutory benchmarks:

• Single Parent or Legal Guardian: You must be single (unmarried and not in a de facto relationship) with at least one dependent child under your legal care.
• Australian Citizenship or Permanent Residency: You must be an Australian citizen or Australian permanent resident.
• Income Threshold: Your taxable income must not exceed $125,000 per annum for the previous financial year.
• Not Restricted to First-Home Buyers: Unlike other schemes, you do not need to be a first-home buyer. Previous homeowners who have sold their property and currently own no residential real estate are eligible.

Property Price Caps in Queensland

In Queensland, the Family Home Guarantee applies to residential property purchases up to statutory price caps set by Housing Australia (currently $700,000 in capital city and regional centres including the Gold Coast and Brisbane). Properties can include brand-new off-the-plan apartments, townhouses, or established dwellings. Explore Broadbeach residences or explore Surfers Paradise residences with BARTA Property specialists.

Applying Through Participating Lenders

Applications must be lodged through participating commercial banks (including major and customer-owned banks). Because places are capped each financial year, obtaining prompt pre-approval is essential. Model your borrowing capacity and mortgage serviceability using BARTA Property finance tools.