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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.

Low-income earners and eligible home buyers may qualify for state and federal government housing assistance policies. This ranges from grants for home buyers to government support to get a low-deposit home loan while avoiding some of the extra costs involved.

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:

  • First Home Loan Deposit Scheme/New Home Guarantee. Under the First Home Loan Deposit Scheme, a limited number of eligible first home buyers can buy or build a home with just a 5% deposit. 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).
  • Family Home Guarantee. This scheme allows eligible single parent borrowers to buy a home with just a 2% deposit and avoid LMI too.
  • Regional Home Guarantee. The Regional Home Guarantee lets you buy or build a new home in regional Australia with a 5% deposit while avoiding LMI costs.

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.

Keystart Home Loans logoWestern 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.

Homestart logoSouth 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

Queensland Government logoThe 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

If you live in Victoria and have a 5% deposit, the government could contribute up to 25% of your property's value to help you buy the home. 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 a simple example:

  • 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 has income caps, caps on price 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.

Written by

Richard Whitten

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full profile

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10 Responses

    Default Gravatar
    amiliaJuly 8, 2022

    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.

      RichardJuly 15, 2022Finder

      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.


    Default Gravatar
    AlisonSeptember 4, 2019

    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 ?

      Default Gravatar
      NikkiSeptember 5, 2019

      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.


    Default Gravatar
    lynmoar@gmail.comMarch 20, 2019

    Is there a government home loan scheme for single mothers in Victoria

      Default Gravatar
      NikkiMarch 21, 2019

      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!


    Default Gravatar
    RoshMay 8, 2017


    Are there loans for people in NSW buying in NSW?

    Could you please advise.


      DeeMay 11, 2017Finder

      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.


    Default Gravatar
    MarieFebruary 22, 2017

    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


      MayFebruary 23, 2017Finder

      Hi Marie,

      Thank you for your question and for contacting 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.


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