How you could get 25% or $200,000 towards your first home: First Home Partner explained
Hurrah! Two weeks ago, the New Zealand government announced the launch of First Home Partner, a new shared ownership scheme to help aspiring first home buyers whose deposit and home loan aren’t enough to purchase their first home.
First, let’s discuss: what is shared ownership?
Shared ownership is when you initially share ownership of a home with a third party, who purchases the home with you. In this case (through First Home Partner), it will be Kāinga Ora. You will be the majority homeowner and occupier, and Kāinga Ora will own a share in the home - one that you will buy out over time.
How much time are we talking about?
The rules are that you will need to do your best to purchase Kāinga Ora's share of the home within the first 15 years of ownership, and must have purchased the share in full by 25 years. You'll get a Kāinga Ora Relationship Manager who will meet with you yearly to review your financial circumstances and help you towards your home ownership goal.
How much you could get will depend on several factors, such as how much of a deposit you have and how much a participating First Home Partner lender is willing to lend you. For example, if you have saved 15% of the purchase price of a home and a participating bank is willing to lend you 60%, Kāinga Ora will contribute 25% to purchase the home with you in return for a 25% share of ownership in the home. You need to contribute at least 5%. Kāinga Ora will make a maximum contribution of $200,000 or 25% of the purchase price - whichever is lower.
To be eligible for First Home Partner, you must be:
over 18
a New Zealand citizen or permanent resident
earn no more than $130,000 in household income
have a good credit rating
not previously received shared ownership support from Kāinga Ora
buying the home to live in for at least 3 years
There are 5 steps to buying your first home through First Home Partner:
For the full eligibility criteria and more information, check out Kāinga Ora’s website, call them on 0508 935 266, or email firsthome.enquiries@kaingaora.govt.nz.
You’ll also find helpful downloads on the website, including the First Home Partner Brochure, an example of a Shared Ownership Agreement, and Kāinga Ora’s Guide to the Shared Ownership Agreement.
Good luck!
Sophia
