You may have heard that Kianga Ora has expanded the shared ownership scheme (First Home Partner) to now allow eligible people to buy existing homes as well as new builds.
This is effective from Monday 14th August 2023.
It will make a huge difference for hundreds of first home buyers that would benefit from the scheme but could not find or afford a new build in the area where they wanted to buy.
More Choice For First Home Buyers
The mortgage advisers at Mortgage Managers have a good knowledge of Kainga Ora’s First Home Partner, and it’s an option that has helped many first home buyers who otherwise would still be renting.
This is one of the shared ownership schemes that is available for people with as little as 5% deposit.
Until now this had only been available to people that had a household income under $130,000 in the last 12-months, and only on brand new homes too. While there were a good number of people that this could help, there have been a good number excluded too.
People were excluded for a few reasons:
- The household income was over $130,000
- On their income they could not afford a new build in the area they need to buy
- Or, in many areas there are minimal new builds available
The good news is Kainga Ora has now increased the income cap to $150,000 which will mean more people are eligible, but has also opened First Home Partner to existing homes as well as still doing the new builds.
Effectively this means more choice and for more people.
The Rules For The Existing Homes
With any shared home ownership scheme there is the need for the house to be acceptable to all owners. That means you as the buyer will of course need to deem the house acceptable, but Kainga Ora as the other owner (shared owner) also needs to accept the house.
Kainga Ora have therefore created a few rules for existing homes:
- Valuation – you need to have the house valued by a qualified valuer to ensure that it is worth what you are paying for the house. This is a check as Kainga Ora have no other way to really check that you are not paying too much.
- Builders Report – you need to get a builders report to confirm that the condition of the house is fine and without any excessive maintenance being required. The limit set for maintenance is $5,000 which ensures that it’s affordable. If the builders report highlights costs that exceed this then the vendor may chose to complete the work before settlement.
Generally they will approve a home that is in good condition.
What they are trying to avoid is to have first home buyers that end up with a home that needs expensive work and especially as most people that will use shared home ownership are doing so as they do not have a large deposit.
Now you can buy an existing home with First Home Partner, and as mortgage advisers we can show you how.
