HomeStart Finance, a lender owned by the government of South Australia, has launched a new loan program aimed at helping potential home buyers reduce their upfront costs.
The program provides an interest-free deposit gap loan of up to $10,000 for five years. It will be delivered via a new Affordable Housing Fund and administered by HomeStart Finance, which will provide the loan both directly and through its broker channel.
John Oliver, chief executive officer of HomeStart Finance, said the loan will boost the purchasing power of customers by reducing their upfront costs, particularly when opting to build, and potentially allow them to search in a broader range of suburbs than they may have first thought possible.
“We’re thrilled the state government has added this loan to the suite of affordable housing measures announced yesterday,” said Oliver. “It’s designed to help low to moderate-income earners cover some of the upfront costs, such as stamp duty, of buying a home. Upfront costs can be a barrier to opting for a construction loan and this will open up more opportunities for customers to build in suburbs more suitable to their needs especially when combined with one (or two) of our loans, and a house and land package from a participating builder.”