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Indigenous home loans – how do they work?

An IBA home loan is provided through Indigenous Business Australia (IBA), which helps Indigenous people achieve their goal of home ownership.

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Marc Terrano
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An IBA home loan could help you get into a home with a lower deposit, and gain approval on finance to buy your own home. Available through the Indigenous Home Ownership Program, these loans are part of a wide range of measures introduced by the Australian government to assist Indigenous people in Australia to buy their own homes.

What's in this guide?

  1. Indigenous Business Australia Home Loans
  2. What fees do IBA Home Loans have?
  3. Keystart Aboriginal Home Loans
  4. Frequently Asked Questions about Indigenous Home Loans

Indigenous Business Australia Home Loans

IBA introduced the Indigenous Home Ownership Program to provide financial assistance to Indigenous Australians and ensure they have access to the property market. Over its history, IHOP has helped over 18,000 Indigenous families into home ownership

These loans can be used for the purpose of purchasing a home that meets your family’s needs, including for the construction of a new home. IBA home loans will not be issued for the purpose of purchasing an investment property or a property that will be used for business purposes.

These home loans and incentives are unique and have a few features that make them stand out from other home loans:

  • Low deposit requirement. These types of home loans have lower deposit requirements compared to standard home loans. This means that applicants don’t have to save up for as much of a deposit, helping them to get into the property market sooner.
  • Low-interest rate. The interest rate for these types of loans is a concessional interest rate. Your interest rate will be linked to your income so you will be able to afford repayments. This interest rate gradually increases to reach the market variable rate, giving you time to adjust spending and get used to making the mortgage repayments.
  • Standard loan terms. These home loans have standard loan terms of up to 32 years, but the loan term may be extended to assist you in repaying your loan.
  • Additional finance assistance. There’s also additional finance assistance available for individuals wishing to build a home on communal land.

What are the eligibility requirements for IBA housing loans?

  • You must be over 18 years of age.
  • At least one applicant must be of Aboriginal or Torres Strait Islander descent.
  • You must be able to meet minimum deposit requirements; you may be able to get assistance from the first home buyers grant scheme of your state or territory.
  • You must have the capacity to meet housing loan repayments.

What are the steps you need to take in order to apply for an IBA Home Loan?

  1. Download and submit an Expression of Interest form, a Confirmation of Aboriginal or Torres Strait Islander Descent form and a completed Consent to use your personal information form, all of which you can find on the IBA website.
  2. Along with the forms you will also need proof of income, evidence of your ability to pay legal fees and stamp duty costs, evidence of your ability to pay the deposit and details of current land or home ownership not financed through IBA.
  3. If you are deemed eligible, your name will be added to the Expression of interest register and you will be invited to apply for an IBA housing loan as funds become available.
  4. When funds become available IBA will contact you and ask you to submit a Housing Loan Application, this will then be used to see if you qualify and how much you may be eligible to borrow.

IBA may only offer you a loan for part of the amount you've requested or need to make your purchase, you will then be required to seek the remainder of the funds from an alternate lender. During the application process, your credit history will be assessed by IBA. You can find out how you stand with your current credit history you can order a credit history check.

What fees do IBA Home Loans have?

There are other fees and charges associated with an IBA Home Loan or purchasing a home in general that will need to be taken into consideration when making this decision.

There are the legal costs associated with home purchase as well as building and pest inspections that should be carried out on the property you are looking at purchasing. You will also have to pay for stamp duty or land tax and mortgage registration fees, if you are a first home buyer you may be eligible for some concessions on some of these.

You can also speak to you lending specialist to discuss any other assistance they can offer for these other costs. Also, speak to IBA about the fees associated with their loans.

Fee descriptionAmount
Mortgage discharge fee. This fee is applied when you complete your loan whether it be through selling the property or refinancing with another lender.$330
Security dealing fee. Charged at times when IBA is asked to produce the original title of the property, such as if you change the name on the title IBA may be asked to provide the title to the land titles office.$165
Late payment administration fee. When loan repayments are unpaid for a period of 28 days or more beyond their due date and not alternate payment arrangements have been made.$20

Keystart Aboriginal Home Loans

keystart
If you live in Western Australia, you can take advantage of a Keystart Aboriginal Home Loan. This gives you two options: to buy the property in a shared ownership scheme with the Department of Housing, or full ownership of the property. The deposit required depends on the size of the loan but begins at 2% for properties below $480,000. No lender’s mortgage insurance (LMI) is charged.

The maximum amount you can borrow depends on whether or not the property is purchased with the Department of Housing in a shared ownership scheme, or you take full ownership, and where in WA you’re buying the property. The maximum loan term is 30 years.

In a shared ownership scheme the Western Australia Housing Authority will fund up to 40% of the property's value.

Find out more about Keystart Home Loans

Frequently Asked Questions about Indigenous Home Loans

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80 Responses

    Default Gravatar
    JocelynMarch 13, 2019

    Can I get a home loan on a Disability Pension???

    Reply
      Default Gravatar
      NikkiMarch 14, 2019

      Hi Jocelyn,

      Thanks for reaching out!

      Generally, a disability pension is considered a valid form of income by most lenders so a home loan application for someone on a disability pension is not treated any differently from an application where someone services their loan with other forms of income. Your options can be viewed from our pensioner home loans page. Alternatively, you can speak to a mortgage broker who can take your personal circumstance into account and offer you a range of borrowing options.

      As a friendly reminder, review the eligibility criteria of the loan before applying to increase your chances of approval. Read up on the terms and conditions and product disclosure statement and contact the bank should you need any clarifications about the policy.

      Hope this helps!

      Best,
      Nikki

      Reply
    Default Gravatar
    SallyJuly 30, 2018

    Hello,

    My partner is of Aboriginal descent and would like apply for a home loan. We would like to know what he needs to prove he is or could someone give me a call?

    Reply
      Avatarfinder Customer Care
      JeniAugust 4, 2018Staff

      Hi Sally,

      Thank you for getting in touch with Finder.

      To apply for an IBA housing loan you must first register your interest by completing the online Expression of Interest Form.

      Your partner may be asked to provide proof or confirmation of Aboriginal and/or Torres Strait Islander heritage when applying for Indigenous-specific services or programs like Centrelink and housing assistance (Indigenous-specific). Government agencies will often supply your partner with their particular guidelines, and ask him to complete a form or provide a letter of ‘Confirmation of Aboriginal and/or Torres Strait Heritage’.

      The family history research tool can help your partner find evidence of his connection to his Aboriginal or Torres Strait Islander ancestors.

      If your partner is eligible, his name will be added to the Expression of Interest Register and he will be invited to apply for an IBA housing loan as funds become available.

      IBA will then write to your partner and ask him to submit a Housing Loan Application which will be used to determine whether he qualifies for a loan and the amount he may be able to borrow.

      You may also want to know if you and your partner may be able to get assistance from the first home buyers to grant scheme of your state or territory by checking out the guide on this page.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

      Reply
    Default Gravatar
    LindaJuly 9, 2018

    Hi I’m aboriginal and looking at buying a house needing to know what I would need to apply for a home loan…
    Thanks in advance
    Linda

    Reply
      Default Gravatar
      NikkiJuly 13, 2018

      Hi Linda!

      Here are the eligibility requirements for IBA housing loans:

      -Over 18 years of age.
      -At least one applicant must be of Aboriginal or Torres Strait Islander descent.
      -Must be able to meet minimum deposit requirements, may be able to get assistance from the first home buyers grant scheme of your state or territory.
      -Be able to have the capacity to meet housing loan repayments.
      -Meet further housing loan requirements that are relevant to your home purchase.

      Here are the steps you need to take in order to qualify and apply for an IBA Home Loan:

      1. Download and submit an Expression of Interest form, a Confirmation of Aboriginal or Torres Strait Islander Descent form and a completed Consent to use your personal information form, all of which you can find on the IBA website.
      2. Along with the forms you will also need proof of income, evidence of your ability to pay legal fees and stamp duty costs, evidence of your ability to pay the deposit and details of current land or home ownership not financed through IBA.
      3. If you are deemed eligible, your name will be added to the Expression of interest register and you will be invited to apply for an IBA housing loan as funds become available.
      4. When funds become available IBA will contact you and ask you to submit a Housing Loan Application, this will then be used to see if you qualify and how much you may be eligible to borrow.

      Hope this helps!

      Thanks,
      Nikki

      Reply
    Default Gravatar
    ReneFebruary 19, 2018

    If I already have a home loan through iba can I unlock equity in current home to buy investment property using iba

    Reply
      Default Gravatar
      LiezlMarch 13, 2018

      Hi Rene,

      Thank you for reaching out to us.

      I’m afraid IBA does not grant loans for business or investment purposes. You may want to consider other lenders offering home equity loans. Better still, speak to a mortgage broker who can take into consideration your current situation and find a suitable loan or lender for you.

      Best regards,
      Liezl

      Reply
    Default Gravatar
    PennyJuly 16, 2017

    Hello My daughter-in-law is of Aboriginal descent and she and our son have a home which is not now suitable for their new-born baby. They have about $300k equity and now wish to look elsewhere and if possible use the Indigenous scheme, but do not have the capacity to borrow what is needed. might they be eligible under your scheme?..

    Thanks Penny

    Reply
      Default Gravatar
      JonathanJuly 27, 2017

      Hello Penny,

      Thank you for your inquiry today.

      They should be eligible as joint applicants. Please note that only one person is required to meet the required Aboriginal and/or Torres Strait Islander descent. If you wish to know more, see IBA’s guide in applying for an IBA housing loan.

      Hope this helps.

      Cheers,
      Jonathan

      Reply
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