Frequently asked questions about the Victorian Homebuyer Fund
Eligible homebuyers can now receive a contribution of up to 25% towards the purchase price of their property, reducing their minimum required deposit to 5% and avoiding the need to pay Lenders Mortgage Insurance.
For eligible Aboriginal or Torres Strait Islander homebuyers, this contribution is up to 35% and the minimum required deposit is 3.5%.
The Victorian Homebuyer Fund is a shared equity scheme, meaning that the State’s financial contribution is made in exchange for a share, or proportional interest in the property.
As the value of the property changes, so too will the value of the State’s share, or interest in the property. This means the Homebuyer Fund will share in any gains in your property’s value.
Participants can repay the Homebuyer Fund’s share, or interest in their property over time. Repayments can be made by refinancing, using savings, and from proceeds when the property is sold.
Want to speak with us about the Homebuyer Fund? Contact us on (03) 7020 1549. Our business hours are 8.30am-5pm (AEST), Monday to Friday, excluding public holidays.
Who is eligible for the Homebuyer Fund?
To be eligible to participate in the Homebuyer Fund, you need to:
- Be an Australian or New Zealand citizen, or permanent Australian resident.
- Be at least 18 years of age at settlement.
- Have saved the required minimum deposit (at least 5% or 3.5% depending on your circumstances) of your property price.
- Earn $128,000 or less per annum for individuals, or $204,800 or less per annum for joint applicants. This refers to your gross annual income.
- Occupy the purchased property as your principal place of residence.
- Be a natural person (that is, not an organisation, company, trust or other body or entity).
- Not purchase your property from a vendor who is a related person.
- Not own an interest in any land in Australia or overseas at the time of purchase (including as trustee of a trust or beneficiary under a trust).
- Not be a shareholder in any corporation (other than a public company) that owns any land in Australia or overseas.
You must meet all of the above eligibility requirements, have an approved loan from a participating lender and have sufficient funds to pay all acquisition costs associated with the purchase to be eligible for the Homebuyer Fund. Eligible participants must become registered owners of the property they buy.
Read case studies about how the Homebuyer Fund works.
Use our online tool to check if you may be eligible
Eligible locations and properties
The property you purchase must be in Metropolitan Melbourne, Geelong or another eligible regional location.
For the full list of regional locations please read the eligible locations page. Some of the eligible regional locations (in addition to Geelong) include:
- Bacchus Marsh
- Clifton Springs
- Ocean Grove/Barwon Heads
- Swan Hill
The property must be a standard residential property such as a house, townhouse, unit or apartment (vacant land is not eligible). The maximum purchase price must be $950,000 or less in Metropolitan Melbourne and Geelong, or $600,000 or less in other eligible regional locations.
The purchase can be for an existing or new property provided that a certificate of occupancy has been issued prior to the date of the contract of sale. This means off-the-plan property purchases are not eligible.
The property must also be vacant when purchased or, if under a lease, the lease must expire within 12 months of the acquisition date and any tenants must vacate the property.
List of all eligible locations
Your ongoing obligations
If approved for the Homebuyer Fund, there are a range of ongoing obligations you are required to fulfil.
Each year following the purchase of your home, you will be required to complete an annual review and provide supporting information to ensure you have maintained your eligibility for the Homebuyer Fund.
This may include providing a certificate of currency of insurance and other details such as payslips, tax returns, home loan statements and utility bills.
You are also required to notify us within 10 business days if your circumstances change at any point in time.
Your property must always be insured, and you are required to provide a certificate of currency during each annual review period.
Maintaining your property
You are required to maintain your property, keep things in good working order and fix any defects.
You must seek approval before making any modifications or renovations of more than $10,000; or those that involve structural changes or require authorisation, such as council approval.
You also must seek approval to refinance your property, sell your property, or make voluntary payments that result in you exiting the Homebuyer Fund within the first two years.
You must make payments on time, such as council rates, utilities, body corporate fees, stamp duty and home loan repayments.
You are required to start repaying the Homebuyer Fund’s interest in your property when:
- Your gross annual income exceeds the applicable threshold on two consecutive annual review reporting dates, or
- You receive a windfall gain such as an inheritance or lotto win of $10,000 or more, or
- You have made a mandatory payment and your gross annual income at the next reporting date has increased by 10% or more, and
- You are approved by your lender to increase your home loan. The loan increase will only proceed if it enables you to make a payment to reduce the Homebuyer Fund’s share by at least 5 percentage points i.e. from 25% to 20% and is at least $10,000. Please note you are required to use your best endeavours to increase the loan if your income exceeds the applicable income threshold, or you have made an earlier mandatory payment.
You can make voluntary (extra) repayments to start repaying the Homebuyer Fund’s share, provided:
- Each repayment reduces the Homebuyer Fund’s share in your property by at least 5 percentage points i.e. from 25% to 20%, and is at least $10,000.
You need to seek and gain approval from the Homebuyer Fund team to pay the full amount back in the first two years, or reduce the State's equity below 5 percentage points i.e. from 25% to 4% in the first two years.
If your property is sold, the money is distributed to the following entities in this order:
- Your bank to pay off your remaining home loan.
- The Homebuyer Fund to pay back its share in your property.
- Anyone else with a legal or equitable interest in the property, such as council rates.
How to apply
Before applying for the Homebuyer Fund, you should check your eligibility and the list of eligible locations where you can purchase a property.
Read answers to frequently asked questions about the Homebuyer Fund requirements and ongoing obligations.
After checking your eligibility (via our eligibility tool) you should gather the required documentation to apply for a home loan, such as payslips, bank statements and tax returns, and speak to a participating lender.
Apply for the Homebuyer Fund
First Home Owner Grant, duty exemptions and concessions
In addition to the Homebuyer Fund, you may also be eligible for a range of other grants, exemptions or concessions. Find out more on our buying a property page.
Last modified: 6 July 2022