The First Home Guarantee (FHBG) is one of three streams of the Home Guarantee Scheme administered by Housing Australia and run via a panel of participating lenders. It lets eligible first home buyers acquire a property with as little as a 5% deposit by having the Commonwealth guarantee the portion of the loan that would otherwise be covered by lender's mortgage insurance — saving LMI premiums often in the tens of thousands. A capped number of places is released each financial year. Conveyancing on an FHBG purchase is mostly about timing discipline, price-cap and eligibility checks, and clean coordination with the lender. This guide walks through what to check and when.
What the Home Guarantee Scheme looks like in 2025–26
The Home Guarantee Scheme (HGS) is administered by Housing Australia under the Housing Australia Act 2018 and supporting investment mandates. It comprises three guarantee streams that operate similarly but target different buyer cohorts:
- First Home Guarantee (FHBG) — eligible first home buyers with a 5% deposit. - Regional First Home Buyer Guarantee (RFHBG) — eligible first home buyers in regional areas with a 5% deposit. - Family Home Guarantee (FHG) — eligible single parents (and, since changes confirmed by Treasury, certain single legal guardians of dependants) with a 2% deposit.
In all three cases the Commonwealth guarantees the lender for the portion of the loan that would otherwise require lender's mortgage insurance. The buyer still takes out a standard mortgage with a participating lender and is fully liable for repayments; the guarantee operates between the Commonwealth and the lender, not between the Commonwealth and the buyer.
For current settings — annual place caps, income caps, price caps by location and the participating lender list — see the live Housing Australia Home Guarantee Scheme page.
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Eligibility — the four anchor tests
Eligibility for FHBG is decided by Housing Australia and the participating lender, not by the conveyancer. But conveyancers should know the four anchors:
Citizenship or permanent residency. Applicants must be Australian citizens or permanent residents at the time of loan settlement. Confirm via passport, citizenship certificate, or visa label / VEVO check as appropriate.
First home buyer status. Applicants must not currently own (and historically should not have owned) residential property in Australia, though limited rule relaxations have been added in recent program updates. See the current eligibility detail on the Housing Australia page.
Income caps. Income is assessed using the applicant's most recent ATO Notice of Assessment. Single-applicant and joint-applicant caps are set separately and reviewed periodically. The current caps are published on the Housing Australia page.
Price caps. A property price cap applies by state and capital-city / regional-centre / other-regional area. The cap is the maximum contract price for the property. Properties priced above the cap are ineligible regardless of buyer income.
There are also occupancy requirements: the buyer must move into the property within a defined timeframe (typically six months) and live there as their principal place of residence for a defined minimum period.
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How a guarantee place is reserved — and how it can be lost
A buyer reserves a guarantee place through a participating lender at the time their loan application is finalised in principle. The reservation is generally valid for a defined period (typically 90 days from issue of the lender's Notice of Reservation, sometimes extendable in defined circumstances), during which the buyer must:
- Sign a contract for a compliant property within the price cap. - Achieve unconditional loan approval. - Settle the property purchase.
If the reservation period lapses without settlement, the place is generally cancelled and returned to the pool. Re-application is possible if places remain available, but for buyers active near the end of a financial year the cap can be exhausted before re-application is possible.
For the conveyancer, this is the single most important practical point: FHBG transactions run on the lender's clock. Standard 42-day or 60-day settlement timelines may not match the lender's expectations under the guarantee program, and any failure to settle within the reservation period can lose the place. Confirm the reservation period at the start of the transaction and align all subsequent dates with it.
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Contract clauses on an FHBG purchase
Subject-to-finance clause. The contract should be conditional on unconditional loan approval, not just on FHBG approval. FHBG is a feature of the lender's loan, not an independent regulatory approval, so the buyer's loan approval covers both. If FHBG eligibility is uncertain at the time of contract, build in enough time for the lender to confirm the place is secured.
Settlement date. Align settlement with the lender's expected timeline rather than choosing a date and asking the lender to work backwards. Participating lenders running FHBG places often have streamlined internal processes that depend on workflow alignment with Housing Australia. Where possible, agree the settlement date with the lender's broker or relationship manager first.
Cooling-off and deposit. Standard state cooling-off rights apply. The deposit (often matching the buyer's available cash equity under the program's minimum deposit setting on the Housing Australia Home Guarantee Scheme page) is paid in the usual way. The Commonwealth's guarantee does not change the deposit mechanics.
Property type and price-cap confirmation. Confirm the property type is eligible (e.g. residential dwelling — investment property purchases are not eligible because the buyer must occupy) and the contract price is at or under the published price cap for the property's exact location. Address-level caps can be checked against the Housing Australia map tool.
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Settlement coordination — the conveyancer's main role
At settlement, an FHBG purchase looks almost identical to a standard purchase. The Commonwealth's guarantee operates behind the scenes, between the lender and Housing Australia, and there is generally no separate registration on title.
Practical settlement steps:
- Confirm the lender has approved the loan unconditionally and the guarantee place is still active. - Coordinate the settlement date and time with the lender, vendor's conveyancer, and the PEXA workspace (or equivalent in non-PEXA jurisdictions). - Calculate state transfer duty correctly. First home buyer transfer duty concessions or exemptions in the buyer's state should be assessed and claimed. - Verify any First Home Owner Grant (where the property qualifies as a new home in a state that still operates a FHOG) is correctly claimed concurrently. - Confirm settlement adjustments (rates, water, owners corporation fees, land tax if applicable) and execute settlement on the scheduled date.
Post-settlement, the buyer's occupancy obligation begins. The conveyancer should advise the buyer to:
- Move into the property within the required timeframe (typically six months). - Use the property as their principal place of residence for the required minimum period. - Keep evidence of occupancy (utility bills, electoral enrolment, postal redirection) — Housing Australia and the lender may audit occupancy in defined circumstances.
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Common stumbles to avoid
Booking settlement past the reservation period. The single most expensive mistake. If the contract is exchanged late in the reservation window with a 42-day settlement, the place is lost. Pull the settlement forward or confirm the lender has authorised an extension.
Misreading the price cap by location. Caps are mapped to specific local government areas, capital-city versus regional definitions, and post-code lists. Properties on the edge of a capital city sometimes fall into a different cap zone than expected. Use the official Housing Australia map tool, not assumptions.
Treating FHBG as a separate finance condition. FHBG is a feature of the lender's loan. The single "subject to unconditional loan approval" clause covers both. Adding a separate "subject to FHBG approval" clause can create ambiguity about which condition controls the contract.
Forgetting the state transfer duty concession. First home buyer transfer duty concessions in each state are separate and applied through the state revenue office at lodgement of the transfer. A buyer using FHBG often qualifies for the state concession too — confirm and claim it.
Investment intention. The program requires the buyer to occupy the property as their principal place of residence. A buyer who tells the conveyancer they plan to rent it out is not eligible — and a conveyancer aware of that intent should advise the buyer that proceeding under FHBG is a breach.
For our companion articles on other current programs, see Help to Buy shared-equity, foreign buyer ban and FIRB, and federal vs state housing measures 2025-26. To find a conveyancer experienced with first home buyer transactions, browse conveyancers in Sydney, Melbourne and Brisbane.
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FAQ
Q: Can my client use FHBG to buy an off-the-plan apartment? A: Yes, where the apartment meets eligible property criteria and the contract price is within the price cap. Off-the-plan timing can introduce settlement-date uncertainty; ensure the lender accepts the off-the-plan settlement profile under the program. Some lenders are stricter than others on off-the-plan timing. Q: We have a 5% deposit but the buyer also wants to claim a state stamp duty concession that requires a 10% deposit. Can both work together? A: Stamp duty concessions in most states have no specific deposit requirement — they require the buyer to meet first home buyer eligibility, occupancy and price criteria. Confirm with the state revenue office for the specific concession. Bank lender requirements (e.g. genuine savings rules) are separate from program eligibility. Q: Can a couple use two FHBG places on the same property? A: No. One place per property purchase. If both applicants apply jointly under the program, they use a single joint place between them. Q: What happens if the buyer's circumstances change and they need to move out before the minimum occupancy period? A: Genuine life circumstance changes are usually accommodated, but the buyer must notify the lender. The guarantee can persist or be repurposed depending on what happens with the property. Get the buyer to engage with the lender as soon as the change is known; do not let them simply rent the property out and hope no one notices. Q: Does the buyer pay anything to Housing Australia for the guarantee? A: No. There is no upfront fee, premium or ongoing charge from Housing Australia to the buyer for the guarantee. The Commonwealth covers the lender's mortgage insurance cost in respect of the guaranteed portion of the loan. The buyer pays only the standard interest, fees and charges on the loan itself.---
Sources
- Housing Australia — Home Guarantee Scheme: housingaustralia.gov.au — Home Guarantee Scheme - Housing Australia Act 2018 (Cth): legislation.gov.au — Housing Australia Act 2018 - Australian Government Treasury — Housing measures: treasury.gov.au — housing - State revenue offices for current first home buyer transfer duty concessions: - NSW: revenue.nsw.gov.au — first home buyers assistance scheme - VIC: sro.vic.gov.au — first home owner - QLD: qro.qld.gov.au — transfer duty concessions - WA: wa.gov.au — first home owner grant - SA: revenuesa.sa.gov.au — first home owners - TAS: sro.tas.gov.au — first home owner grant - ACT: revenue.act.gov.au — home buyer assistance - NT: nt.gov.au — home owner assistance - State law societies / find a conveyancer: lawcouncil.org.au
Information in this article is general and current as at 19 May 2026. Annual place caps, income caps, price caps and participating lender lists are updated by Housing Australia each financial year; verify current settings on the linked page before advising your client.
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