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February 6, 2026

Family Home Guarantee – Helping Single Parents into Homeownership

Buying a home in Australia can be challenging for single parents and guardians due to high property prices and the need to save a 20% deposit. To help, the government introduced the Family Home Guarantee (FHG) program, which allows single parents to buy a home with as little as a 2% deposit and without paying Lenders Mortgage Insurance (LMI).

What is the Family Home Guarantee?

The Family Home Guarantee is a government scheme that helps single parents buy a home with a small deposit. The government guarantees up to 18% of the property’s value, which allows buyers to secure a loan with as little as 2% deposit and without paying LMI.

Eligibility criteria

To be eligible for the Family Home Guarantee, you must meet the following criteria:

• Relationship Status: You must not be married or in a de facto relationship. Separated applicants may be eligible if legally recognised as single.
• Citizenship and Residency: You must be an Australian citizen, aged 18 years or over.
• Income Cap: Your annual taxable income must not exceed $125,000 in the most recent financial year.
• Property Ownership: You cannot own any other property at the time of settlement. This scheme is open to previous homeowners, provided they no longer own a property.
• Deposit Requirement: You must have at least 2% of the property’s value as a deposit.
• Owner-Occupier: You must buy or build a home to live in (investment properties are not eligible).

What type of home can you buy?

You can use the scheme for several types of homes, giving you flexibility in your choice.

• An existing house, townhouse, or apartment.
• A house and land package.
• Vacant land with a separate contract to build a home.
• An off-the-plan apartment or townhouse.

Keep in mind that property price caps apply, and these vary depending on your state and region. You can use the government’s Property Price Cap Tool to check the property price caps for your location.

How to apply for the Family Home Guarantee

Applying for the scheme is a straightforward process. Follow these steps:

1. Check your eligibility. Make sure you meet all the requirements.
2. Gather required documents. Prepare all necessary documents for income verification and identification.
3. Contact a participating lender. Find a lender that offers the scheme.
4. Apply and reserve a place. Once your eligibility is confirmed, your participating lender will submit an application to Housing Australia (formerly NHFIC) on your behalf. If approved, a place in the scheme will be reserved for you. Spots are limited and allocated on a first-come, first-served basis.

Benefits of the Family Home Guarantee

The Family Home Guarantee makes homeownership more achievable for single parents.

• Low Deposit: Buy a home with as little as 2% deposit.
• Save on LMI: With the government guarantee, you won’t have to pay Lenders Mortgage Insurance.
• Enter the Market Sooner: Get into your own home faster, without the long wait to save a 20% deposit.
• Combine with Other Schemes: You may be able to combine the Family Home Guarantee with other government incentives, such as the First Homeowner Grant (FHOG), to maximise your benefits.

Important Considerations and Risks

While the scheme offers many benefits, it’s important to be aware of the risks.

• Higher Loan Amount: A smaller deposit means you have a larger loan, which results in higher monthly repayments.
• Interest Rate Risk: Higher repayments are more sensitive to interest rate changes.
• Limited Equity: With a 2% deposit, you start with very little equity, which can make you vulnerable if property values decline.
• Limited Places: The scheme has a limited number of spots each financial year. For 2025/2026, there are 5,000 places available.

Frequently Asked Questions

Q: How is the Family Home Guarantee different from the First Home Guarantee?
A: The Family Home Guarantee is designed for single parents and guardians, while the First Home Guarantee is for first home buyers. Starting 1 October 2025, the First Home Guarantee is expected to have unlimited places and be open to permanent residents, subject to government confirmation.

Q: Can I use the Family Home Guarantee scheme if I have owned a property before?
A: Yes. Unlike other first-home buyer schemes, you can use the Family Home Guarantee even if you have owned a property before. You just cannot own one at the time of settlement.

Q: What is included in the $125,000 income cap?
A: The income cap is based on the “taxable income” as shown on the applicant’s Notice of Assessment (NOA).

Q: What are the rules after I buy a home?
A: You must live in the property as your primary place of residence.

Q: Do I need to be a first home buyer?

A: No, you do not have to be a first home buyer to be eligible for this scheme.

The Family Home Guarantee provides a valuable pathway for single parents to achieve homeownership with just a 2% deposit and no LMI. Speak with a mortgage broker to explore your options and decide if this scheme is right for you. Ready to see if you’re eligible? Our team at Kian Mortgage Solutions can help you navigate the application process and find the right loan for your needs. Call us on 1300 00 KIAN today to get started.

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