First Home Loan Deposit Scheme
The Australian Government has announced it will introduce a First Home Loan Deposit Scheme to support eligible first home buyers purchase a home faster.
The Scheme is expected to commence on 1 January 2020 and will be administered by NHFIC.
The Parliament of Australia passed legislative amendments to give effect to the Scheme on 15 October 2019 (see the APH website here)
NHFIC is also consulting with financial institutions and other key stakeholders leading up to the commencement of the scheme.
Market sounding process for lenders
In anticipation of the commencement of the Australian Government’s new First Home Loan Deposit Scheme, NHFIC has been undertaking detailed consultations with lenders regarding their potential participation in the Scheme.
NHFIC has sought feedback from lenders on implementation of the Scheme via a market sounding process. This market sounding was the pre-cursor to a procurement process which will be used to establish a panel of lenders to participate in the Scheme. It builds on initial stakeholder consultations undertaken to date.
All residential mortgage lenders were welcome to participate in the market sounding process. NHFIC made a Scheme Features paper available to lenders for the purposes of the market sounding and encouraged feedback on the points it identified for consultation.
Submissions to the market sounding process closed at 5pm on Thursday 3 October 2019.
NHFIC received strong interest from the market with more than 100 residential mortgage lenders and registered brokers participating in the market sounding process.
To date, 27 responses to the Market Sounding Scheme Features Paper have been received.
NHFIC would like to thank all participants for their input.
Consultation on NHFIC’s Investment Mandate
NHFIC’s Investment Mandate is also in the process of being updated and has now been released for public consultation.
Treasury is inviting submissions by 4 November with full details, including submission guidelines, available on the Treasury website https://treasury.gov.au/consultation/c2019-23295
The draft Investment Mandate Amendment outlines further details regarding the First Home Loan Deposit Scheme, including proposed borrower, lender and loan eligibility criteria as well as property price caps, and NHFIC’s new housing research function (see media release).
APRA consultation on capital requirement for First Home Loan Deposit Scheme mortgages
On 28 October 2019, APRA issued a consultation letter inviting submissions on the capital treatment of residential mortgages covered by the First Home Loan Deposit Scheme. Information on how to respond is contained in the consultation letter below.
Submissions close on 11 November 2019.
Further information is available at https://prod.apra.pnx.skpr.live/capital-requirement-for-first-home-loan-deposit-scheme-mortgages
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