Changes to the Kainga Ora First Home Partner Scheme
First Home Partner is a shared ownership scheme administrated by Kainga Ora and is another great tool to help first home buyers into their own home.
First Home Partner is a shared ownership scheme to help aspiring first home buyers whose deposit and home loan aren’t quite enough to buy a home that meets their needs, purchase a home together with Kāinga Ora.
What is Shared Ownership?
Shared ownership means that you initially share ownership of the home with a third party who purchases the home with you (in this case Kāinga Ora). You are the majority homeowner and occupier, but we will own a share in the home, that you will buy out over time.
The make-up of shared ownership will be determined by several factors, including:
How much of a deposit you have
How much a participating lender is willing to lend you
How much contribution Kāinga Ora will make towards purchasing the home with you.
For example, you may have saved 10% of the purchase price of a home and a participating bank is willing to lend you 75%. Kāinga Ora then contributes 15% to purchase the home with you in return for a 15% share of ownership in the home.
How much equity can Kāinga Ora contribute?
Applicants for First Home Partner will be assessed on a case-by-case basis. The maximum contribution Kāinga Ora will make towards a home purchase is 25% or $200,000 – whichever is lower.
You will need to meet the lending requirements of a participating bank to receive a home loan and be able to contribute a minimum of 5% of the purchase price of the home you are interested in buying
How is buying a home with First Home Partner different?
Shared ownership won’t feel very different from full home ownership from day-to- day. You are the majority homeowner, and Kāinga Ora will not use or occupy your home. However, there are some important differences you should consider
you will need to meet the First Home Partner eligibility criteria
Kāinga Ora will share ownership of the home with you as co-owner on the title
the shared ownership relationship between you and Kāinga Ora is governed by a Shared Ownership Agreement
you commit to living in the home as your primary place of residence for at least three years from settlement
you meet annually with a Kāinga Ora Relationship Manager to review the financial circumstances of your household and work towards the goal of achieving full home ownership
you will need to do your best to purchase the share of the home owned by Kāinga Ora within the first 15 years of ownership and must have purchased the share in full by the 25th anniversary from the date of settlement on the home
you will need to seek permission from Kāinga Ora before making improvements or renovations, or if you want to sell your home.
Kainga Ora has partnered with 3 providers in the market:
SBS
BNZ
Westpac
5 easy steps to home ownership with First Home Partner
If you think First Home Partner might be for you, follow these steps to see how you can start your journey towards home ownership.
On Monday 31st July some the government announced some new changes to the First Home Partner/Shared Ownership Scheme.
The key changes include:
All eligible applicants can purchase existing homes, in addition to new builds, through the scheme. This is intended to provide buyers with a greater choice of homes.
The household income cap has increased from $130,000 to $150,000.
The income cap criteria for intergenerational whānau has broadened to include larger whānau, allowing any eligible whānau of at least six people who normally live together to purchase a home through First Home Partner.
The changes are expected to take effect from Monday, 14 August.
Pre Approval and Bank Lending Criteria:
In addition to meeting the Kāinga Ora eligibility criteria for First Home Partner, you will also need to satisfy the lending criteria of a participating bank in order for them to provide you with a home loan.
All banks and lenders have slightly different lending criteria, but they will include your financial ability to repay the loan, your financial circumstances, your credit history and the way you’ve conducted your bank accounts in the past.
Still deciding if First Home Partner is for you?
As mortgage advisers with over 20 year industry experience we can help you find the right options to suit your financial needs. The process can be quite overwhelming but if you have the right team on your side – it doesn’t have to be.
Let us take all the hard work out of exploring your options. Contact us to discuss and let us help you!
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.