Indigenous home loans

Indigenous Business Australia (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 provides financial assistance to Indigenous people, ensuring they have access to the property market. It offers home loans with low deposits and low fees, including for the purchase of an established property, for purchase and renovation, for residential land and for the construction of a home.

There is usually additional assistance for anyone living in remote areas or relocating from a remote area.

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 much lower deposit requirements compared to standard home loans. For purchasing a home, the amount of deposit you need is assessed on your gross income.
• Low interest rate. The interest rate for these types of loans is a concessional interest rate. Your interest rate is worked out on a sliding scale based on your income. 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 other fees associated with homebuying, such as conveyancing costs, property valuations and building and pest inspections, as well as for home improvements.

What are the eligibility requirements for IBA housing loans?

• You must be over 18 years of age.
• You must be an Australian citizen or permanent resident.
• 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.
• You must intend to live in the property as your main place of residence.

How to apply for an IBA home loan

1. You first need to complete an Expression of Interest form, which can be filled in online. You can save your EOI and return to it at any time.
2. After your EOI has been submitted, an IBA Home Loans Officer will be in touch with you to go through your eligibility and circumstances.
3. If eligible, you will be asked to submit an application alongside other supporting documents, like your proof of income and identity verification.
4. If you are deemed eligible, your name will be added to the Expression of Interest register while you wait for funds to become available.
5. When funds do become available, IBA will contact you and ask you to submit a Housing Loan Application alongside other supporting documents, like your proof of income and identity verification. The application 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 who has saved at least $1,000 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. You may also be eligible for a combination of grants:

• Home Buyer Booster Grant and Deadly Deposit Grant; or,
• Home Buyer Booster Grant and AHO Tenancy Plus Grant.

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 starts from 2% for properties below $560,000. No lender’s mortgage insurance (LMI) is charged. Properties in the Kimberley and Pilbara regions will require a larger deposit, but also have a higher maximum property price. There are also income limits that you need to meet and this also varies based on location of the property.

The maximum amount you can borrow also depends on whether or not the property is purchased with the Department of Housing in a shared ownership scheme, or you take full ownership. 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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More questions about Indigenous home loans

• Can I refinance my current loan with another lender over to an Indigenous home loan?

  Yes, you may be able to do this but there may be fees and charges attached to your current home loan that you will need to pay, so it would be best to contact your current lender to discuss this with them before you contact IBA or Keystart.

• Can I take advantage of these schemes if I am a single parent and my children are Indigenous but I am not?

  Unfortunately, you won't be able to purchase a property under this scheme unless your child is a joint property owner. At least 1 applicant needs to be of Aboriginal or Torres Strait Islander descent in order to qualify for this scheme. Your children will need to be at least 18 years old before they're eligible for the scheme or be named on the loan or property documents.

• Can I get an IBA loan and access first home owner grants?

  In many cases, yes. It depends on the scheme and your eligibility, but you should be able to use an IBA loan in conjunction with a first home owner grant or a stamp duty concession.

• Can I get a better deal with a regular bank?

  It's always a good idea to compare interest rates and see where you can find the cheapest loan rates. You may find you're eligible for a loan from another bank or lender with a better rate.

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Written by

Richard Whitten

Editor

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 bio

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