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Indigenous home loans
Aboriginal people may qualify for a home loan through Indigenous Business Australia (IBA). Aboriginal borrowers living in NSW or WA also have other options through state programs.
The IBA has specific home loan products to support Indigenous home ownership. Eligible Aboriginal and Torres Strait Islander people can qualify for one of several loan products through the IBA's Indigenous Home Ownership Program. You can also apply for home loans from other lenders too.
Indigenous people living in NSW can also get support in the form of a grant through the Aboriginal Housing Office. In Western Australia, the lender Keystart also offers an Aboriginal Home Loan.
Indigenous Business Australia home loans
IBA introduced the Indigenous Home Ownership Program (IHOP) to provide financial assistance to Indigenous people and ensure they have access to the property market. Over its history, the IHOP has helped over 18,000 Indigenous families into home ownership.
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 as much for 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.
- 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 1 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.
How to apply for an IBA home loan
- 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.
- 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.
- 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.
NSW: AHO Home Ownership Grants
Aboriginal people living in NSW may qualify for support through the Aboriginal Housing Office (AHO). There are several grants on offer:
- Home Buyer Booster Grant. Up to $2,500, you can use this grant to cover some costs associated with home buying, such as home insurance, legal fees or building inspections. You must be a private renter or social housing tenant to qualify.
- Deadly Deposit Grant. This grant matches the amount you have saved for a deposit, dollar for dollar, to a maximum amount of $10,000. You must have saved at least $1,000 to qualify.
- AHO Tenancy Plus Grant. If you are a long-term AHO tenant, you can get extra contributions towards your deposit savings, up to a maximum amount of $20,000.
There are income limits for all these grants. You must be an Aboriginal person living in NSW who does not currently own a home.
WA: Keystart Aboriginal Home Loans
If you live in Western Australia and are Indigenous, you can take advantage of a Keystart Aboriginal Home Loan. This gives you 2 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.
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