The Government has launched the first phase of its Progressive Home Ownership scheme, signing up providers in Queenstown and Auckland to support 100 families.
The $400 million scheme was flagged as part of the KiwiBuild reset back in September 2019, and promised as part of the Confidence and Supply Agreement between Labour and the Greens.
Housing Minister Megan Woods today named the Queenstown Lakes Community Housing Trust and the Housing Foundation in Auckland as the first providers.
She said they will help 100 low to median income families who are struggling to pull together a deposit, or pay a mortgage, into homeownership.
Woods said more phase one providers in other centres would be announced soon.
"The fund will focus on areas where housing affordability is most severe, with a strong preference for new houses to build supply.
"It will help up to 4000 families who could not otherwise afford home ownership. We expect to see the first group of families in their own homes by November this year", she said.
The funding will also prioritise Maori and Pacific people, and scale up funding for organisations already providing PHO schemes with wraparound support services, such as budgeting advice.
Greens co-leader Marama Davidson said her party was proud to be part of a Government working to ensure everyone "has the home they deserve".
"We know that high rents make saving for a deposit almost impossible for many families.
"This fund means more low income families who have been locked out of the housing market will finally have a chance at owning their own home", Davidson said.
HOME OWNERSHIP MODELS INCLUDED
Shared equity or ownership: where a household owns part of the home and a third party owns the rest. Over time the household buys back the portion of the home from the third party.
Rent-to-buy: where the provider purchases a house outright and a household rents that home from the provider, possibly at below market rates to enable them to save a deposit. Alternatively, a standard market rent could be charged with the provider setting aside a portion of that rent as a deposit on behalf of the homeowner. The household may have the right to purchase the home either outright or through a shared equity scheme
Leasehold: where a provider sells a home to a household but retains ownership of the land beneath it. The exclusion of land from the purchase lowers the deposit and servicing cost for the homeowner. The homeowner may be required to pay a ground rent to the landowner for ongoing use of the land. In some cases, homeowners may have the right to purchase the land from the provider at a later date, once the homeowners have paid down some of their debt and are better able to afford it.
ELIGIBILITY CRITERIA
• applicants must be over the age of 18
• applicants must not currently own any property in New Zealand or overseas
• applicants must be a New Zealand Citizen, Permanent Resident, or Resident Visa Holder who is 'ordinarily resident in New Zealand'
• applicants must have a household income of under $130,000 per year
• applicants need to be first home buyers or 'second chancers' (as defined in the eligibility criteria for KiwiBuild), and
• applicants will need to be able to secure a commercial mortgage (i.e. good credit histories, minimal debt), and have saved some amount of deposit
