Government housing loans and assistance
Getting a home loan from the government isn't really possible, but there are state and federal policies to support low-income borrowers.
Key takeaways
- Federal government schemes allow eligible buyers to get a home loan with a 2% or 5% deposit and avoid LMI.
- Investigate state programs like Keystart for low-deposit or shared equity options, or the federal Help to Buy scheme.
- Indigenous Business Australia provides home loan support and a mortgage broker can offer personalised advice.
Can I get a home loan through the government?
The Australian government doesn't issue home loans. But the government does work with lenders and the National Housing Finance and Investment Corporation (a government initiative) to help low-deposit borrowers get home loans.
Federal government home loan assistance
The following are the schemes available:
- Australian Government 5% Deposit Scheme. Under the Australian Government 5% Deposit Scheme, eligible first home buyers can buy or build a home with just a 5% deposit. There is no cap on the number of places and no waiting list, and income caps have been removed, though property price caps still apply and vary by region. You borrow the remainder through an approved lender and then apply for the scheme. This allows you to get a home with a low deposit while avoiding the added cost of lenders mortgage insurance (LMI).
- Single parent and legal guardian pathway. The same scheme lets eligible single parents and legal guardians buy a home with just a 2% deposit and avoid LMI too. This pathway was previously known as the Family Home Guarantee.
State government home loan support
Several state governments have housing loan support policies. These are typically (though not in all cases) shared equity schemes. A shared equity scheme means the buyer and the government share the costs of getting together a deposit. But the catch is that the government gets a share of the property's value.
And don't forget that most state and territory governments offer grants for first home buyers and stamp duty discounts or exemptions.
Western Australia - Keystart
Keystart was established in 1989 to help Western Australians who are unable to meet the deposit requirements of mainstream lenders. The scheme provides low-deposit home loans to WA residents who fall below an income cap. The loans are available with a 2% deposit in metro areas and a 10% deposit in regional areas. First home buyers can also use the state’s first home owner grant scheme to help fund their deposit.
Keystart loans differ from the low-deposit home loans traditional lenders may provide because they do not require lenders mortgage insurance (LMI).
Shared equity home loans
Keystart also offers a shared equity home loan called a Shared Ownership home loan. This loan helps finance properties offered by the Housing Authority. The program enables loan recipients to finance part of the price of the property through a Keystart Home Loan, with the Housing Authority contributing a percentage and sharing ownership.
Keystart’s website offers a full rundown of products as well as questionnaires to determine eligibility.
South Australia - HomeStart Finance
South Australians can increase their borrowing power and reduce the amount they need to save for a deposit through HomeStart, a lender backed by the South Australian government.
HomeStart was launched in 1989 as a government organisation to help South Australians achieve home ownership sooner. The program enables borrowers to avoid paying LMI and instead pay a much less expensive loan provision charge. It also offers loans at 97% LVR for certain groups of customers.
HomeStart also has shared equity loans. HomeStart can contribute between 5% and 25% of your home's value.
Queensland Housing Finance Loan
The Queensland Housing Finance Loan is a low-deposit home loan to help eligible Queenslanders build or buy a home. The loan has variable or fixed rate options and requires only a 2% deposit with no LMI.
The loan is structured to help borrowers meet their repayments. Rather than calculating repayments solely on loan size, term and interest rates, the Queensland Housing Finance Loan also takes into account borrowers’ income. Initial monthly repayments start at 30% of the borrower’s income and will not exceed 35% of their income.
The Queensland government’s website has information on the Queensland Housing Finance Loan, including eligibility requirements and how to apply.
Victorian Homebuyer Fund
The Victorian Homebuyer Fund closed to new applications on 10 September 2025, so you can no longer apply. Existing participants continue under their agreements. Victorian buyers looking for a shared equity option now can apply for the federal Help to Buy scheme, which has been open since 5 December 2025 and contributes up to 30% of the price of an existing home or 40% of a new home if you have a minimum 2% deposit. The Homebuyer Fund is a shared equity scheme. When the property is sold, the fund receives a portion of the sale price in proportion to the amount it contributed.
Here's how it works for people who were already in the scheme when it closed:
- You buy a $600,000 home.
- Your deposit is 5%, or $30,000.
- The Homebuyer Fund contributes 25%, or $150,000.
- You borrow the remaining 70% from a participating lender.
- After 4 years, you sell the home for $700,000. The fund receives 25% of the sale or $175,000.
The scheme had income caps, caps on property values and other eligibility restrictions. You can learn more about the scheme here.
Indigenous Business Australia home loans
If you are an Aboriginal or Torres Strait Islander home buyer, you may qualify for home loan support through Indigenous Business Australia (IBA). IBA offers home loan support through the Indigenous Home Ownership Program, which lets eligible borrowers qualify for loans with low deposits.
Tips for low-income borrowers
The road to home ownership can be a long and challenging one, especially for people on low incomes. Beyond the options listed above, here are some tips to help you.
- You can use the First Home Super Saver Scheme to build your deposit via extra super contributions.
- Read our guide on how to save your house deposit.
- Compare home loans for low-deposit borrowers.
- Learn how people on Centrelink payments can get home loans.
- Talk to a mortgage broker to get expert help.
- Check out more of Finder's money savings tips.
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Hi i am wondering if a person on an age pension that is looking for part time work,
with a $10,000 deposit be able to purchase a small house or seniors 2 bdrm villa, i am 66yrs but am able to work p/time.
Hi Amilia,
The eligibility requirements to apply for a home loan vary depending on the lender. You can contact your preferred lender directly to enquire.
You can also request assistance from a mortgage broker to get personalised advice regarding your situation. Their services are free, and they can help you find a suitable lender to work with. Simply fill out the form found on this page.
Regards,
Richard
If someone that already resides in a commission home, paying rent. Can the residence buy the property from the department of housing, and apply for the groverment scheme loaned? To buy the property from the department of housing ?
Hi Alison,
Thanks for getting in touch! While we provide a page for government home loans and assistance, your inquiry is very broad and you might need to contact the Dept. of Housing in your state as every state has different rules.
Sorry, I can’t be of help at this time. Feel free to reach back out for further assistance.
Best,
Nikki
Is there a government home loan scheme for single mothers in Victoria
Hi Lyn,
Thanks for reaching out!
We have a page that shows home loans for single parents however these are for Centrelink recipients and you can view it from our home loan options for single parents page.
I suggest contacting Homestart Finance to check if they give loan options for single mothers. The three states above are the only places where government loan options are currently available. If you live elsewhere, such as in New South Wales or Victoria, you may want to check with your state government for any other options that may be introduced over time.
Hope this helps!
Best,
Nikki
Hi,
Are there loans for people in NSW buying in NSW?
Could you please advise.
Thanks
Hi Rosh,
Thanks for your question.
Currently, there are only three states (Queensland, WA and SA) where government loan options are available. If you live elsewhere, such as in New South Wales, you may want to check with your state government for any other options that may be introduced over time.
Cheers,
Anndy
I would like to please find out if I am eligible to apply for the Government’s interest free home loan scheme
I would appreciate your advise and information re above scheme
thanks
Marie
Hi Marie,
Thank you for your question and for contacting finder.com.au we are a financial comparison website and general information service we are not mortgage specialists so can only offer general advice.
Basically, your eligibility for the government loan programs will depend on the state you live in. So it would be best to check your state government whether there will be available loan options for you and if you’re eligible.
Cheers,
May