1 August, 2008

First Shared Equity home loans pre-approved

Twenty-six aspiring first home owners have this week been granted pre-approval for a Shared Equity loan, the first group to benefit from the government’s new pilot scheme, says Housing Minister Maryan Street.

“The successful applicants will receive loan pre-approval certificates in the mail in the next few days and will then have 90 days to buy a home.

“Under the two year pilot scheme, launched on July 1, Housing New Zealand allocates the loans at the end of each month, so the first applications were processed yesterday,” Maryan Street said.

“Up to 700 loans will be available under the $35 million scheme which will operate
in Auckland, Wellington, Nelson, Christchurch and Queenstown. These areas were chosen because they have the highest house prices.

“A Shared Equity loan is an interest-free loan from the government, topping up a Kiwibank home loan and home buyer’s own deposits. It means people don’t have to borrow as much from the bank.

“They still have to make regular repayments on their home loan from Kiwibank, but their Shared Equity loan does not need to be paid back until the home is sold or their Kiwibank loan term ends – although there are incentives to repay the Shared Equity loan earlier,” Maryan Street said.

“The scheme is limited to those with a household income of between $55,000 and $85,000, who meet certain criteria. A maximum house price cap, which varies across the targeted regions, applies and this will move with the market.”

Those interested in applying for a Shared Equity Loan can get further information by calling freephone 0800 80 HNZC (0800 80 4692) or visiting the website

www.sharedequityscheme.co.nz.

ENDS

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