Home ownership mortgage programme announced
Home ownership mortgage insurance programme announced
Housing Minister Steve Maharey today announced a two-year Government initiative with Kiwibank to make access to home ownership easier for low to modest income earners.
From September 2003, people earning up to and including $50,000 a year, or up to and including $100,000 if there are more than two main sources of household income, may be able to get a home loan. They’ll also need a good credit history, be able to afford repayments and meet other conditions.
Steve Maharey said those who qualify won’t need a deposit if buying a house up to $100,000, and only a 5% deposit if buying a house over $100,000, and that money could have been gifted.
“This is possible because, through Housing New Zealand Corporation, we’ve developed and are subsidising a mortgage insurance programme to the value of $5.3 million. This will enable Kiwibank to reduce the risk of lending to people with little or no deposit. “For many people, such as Housing New Zealand Corporation tenants paying market rent, home ownership is only just out of reach.
“Either their income is just slightly too low, or they aren’t able to save a deposit. Yet once in a house they would be able to manage the repayments and keep a reasonable standard of living.
“The partnership with Kiwibank aims to make access to home ownership easier for these people.
"We will therefore be having an initial focus on HNZC market rent tenants and current applicants on the waiting list for rental housing for whom home ownership may be a viable option.
“As part of the initiative, people will have access to information about the costs and responsibilities of owning a home, and once they have their own home, Kiwibank will keep in contact to provide ongoing advice and support.
“We chose Kiwibank for this trial because it’s readily accessible throughout New Zealand. It was a commercial decision by Kiwibank to enter into the trial.
“Trialling for two years will allow us to test the initiative on a small scale to find out how successful it is before we expand it to other lenders,” Steve Maharey said.
Steve Maharey said state house tenants would not be able to buy their homes, and the initiative won’t help everyone who wants to buy a house.
Kiwibank is expected to approve about 1,800 loans as part of this trial.
starts in September 2003 and will run for two years.