Home Loans for Indigenous Australians

Indigenous Business Australia (IBA), along with other lenders, help Indigenous Australians achieve their goal of home ownership.

With many individuals spending their life working towards home ownership, owning your own property or land is the Australian dream. The Australian Government has introduced a range of measures to assist Indigenous Australians in realizing this dream through the Indigenous Home Ownership Program. This program is designed to help Indigenous Australians purchase their own home or land with specially designed home loans.

What loans are available for Aboriginal Australians?

Although there are no restrictions for Aboriginals to access home loans from any financial provider, the Australian Government and IBA have introduced unique schemes and home loan products that are designed to make property purchasing more accessible to Aboriginal Australians.

One such support program is concessional housing finance and aftercare support for eligible customers. This allows recipients to purchase an established residential property, land and/or construct a new home, or make essential improvements to existing homes. There are also grants for those customers who will be first home owners.

Indigenous Business Australia Home Loans

IBA have introduced the Indigenous Home Ownership Program to provide financial assistance to Indigenous Australians and ensure they have access to the property market.

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 other 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?

• 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.

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

• Download and submit an Expression of Interest form from the IBA website.
• Along with the Expression of Interest form you will also need to send in a Confirmation of Aboriginal or Torres Strait Islander Descent form, proof of income, evidence of your ability to pay legal fees and stamp duty costs, evidence of your ability to pay the deposit, details of current land or home ownership not financed through IBA and a completed Consent to use your personal information form (all forms mentioned above can be downloaded from www.iba.gov.au).
• 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.
• 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 are some of the costs to consider when you are looking to apply for an IBA Home Loan?

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.

These fees are charged by IBA there may be additional goverment fees and charges to be paid, please check www.iba.gov.au for details.

Keystart Aboriginal Home Loans

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.

Borrowers can make additional repayments on top of the regular monthly repayments and use a redraw facility.

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.

Find out more about Keystart Aboriginal Home Loans

About Compare home loans today

What should you look for when you are comparing any home loans?

• Interest rate. One of the most important aspects of a loan is the interest rate. You may want to look for a home loan with a low interest rate. Also, decide upfront if a fixed or variable interest rate is better for you and select a loan product accordingly.
• Flexibility in repayments. Some home loans offer greater flexibility in repayments than others. You may be able to make additional repayments when you have the funds as it helps you save on interest. Also, look out for whether you can make weekly, fortnightly or monthly repayments and whether this will line up with your budget.
• Loan term. Term lengths will vary depending on what home loan you decide to go with. This is how long your loan is for and the period of time you have to pay it back. This can vary depending on how much money you borrow so ensure you select a loan with a long enough term length for you to pay off your loan.
• Restrictions Some loans have various restrictions in terms of repayments, redraws, and deposits. Take a look at the terms and conditions imposed by the lender and if this will affect your ability to make repayments. Some of the government schemes also require you to meet certain requirements and terms, so ensure you meet all of these to avoid any penalties.

One of the most important things to avoid when borrowing is not to borrow more than you can afford. Make sure you don’t fall into too much debt and don’t borrow beyond your means. Know how much you can make in repayments and how much of a deposit you can put forward without damaging your ability to cover your living costs.

Frequently Asked Questions about Indigenous Home Loans