The Scottish Government's First Home Fund re-opens on 1st April 2021.
The First Home Fund aims to help first-time buyers get onto the property ladder. Up to £25,000 is available to all first-time buyers towards the purchase of both new build and existing properties.
This piece offers an overview of the scheme and lays out some frequently asked questions
Overview:
- Applications will open on Thursday 1st April 2021
- The fund is limited to £60M and will be allocated on a first-come first-served basis.
- Valid for completions from Thursday 1st April 2021.
- The scheme is only applicable for people who have never owned a house in Scotland, or anywhere else in the world, previously. It cannot be used in conjunction with HTB (Scotland).
- The maximum contribution from the Scottish government is £25,000 (or 49% of the house price or valuation - whichever is lower).
- The fund can be used on any priced property. No restriction on builder incentives, subject to individual lender criteria.
- Buyers are limited to one application per property, so if joint-buying, you can only submit one application and use one fund of £25,000.
- If buying jointly, only one party needs to be a first-time buyer.
- A minimum 5% deposit is required. Buyers can continue to use HTB ISAs and Lifetime ISAs towards their deposit.
- A mortgage should be used to help fund the property. The mortgage must be at least 25% of the house price. The mortgage must be a repayment mortgage.
- The scheme is not available for Buy-to-Let properties.
- There is an admin fee of £550 to the Scottish government, payable 3 weeks prior to completion - this is refunded if the application is unsuccessful.
- Cash buyers cannot use this scheme.
- There is no restriction in which area the house can be bought. This is open to the whole of Scotland.
- Although the Scottish Government will have an equity share in the property, the buyer will own the property outright. The equity stake will need paid to the Scottish government if the house is sold. There will be no monthly payments made toward the Scottish Government and no interest will be charged.
- Clients can be referred to Mortgage Advice Bureau who will answer any questions.
FAQs:
Can you apply to the fund after conclusion of missives?
This is not permitted except where there are exceptional circumstances and the usual application handling timescales would not be compromised. This also applies to cases where builders are asking clients to sign a “conditional missive”, for a reservation in 2021/22, prior to the scheme re-opening on Thursday 1st April 2021. Link Housing advise against this practice as they cannot guarantee funding.
Can you apply for the First Home Fund 2021-22 funding before the scheme re-opens?
No. Applications for 2021-22 funding can only be submitted when the scheme re-opens on 1 April 2021. We can manage the process and submit application on your behalf
You have decided against buying the property you were approved to buy with support from the First Home Fund: can you change the property or do you need to re-apply?
You must re-apply if the property you originally intended to buy now differs. The only exception is a different plot number with a property of the same value and builder within the same development, prior to receipt of Confirmation Letter from a solicitor
Will there be changes to First Home Fund criteria for 2021-22 applications?
No changes will be made.
Can you apply to the First Home Fund after the conclusion of missives?
This is not permitted except where there are exceptional circumstances and the usual application handling timescales would not be compromised. This also applies to cases where builders are asking clients to sign a “conditional missive” now, for a reservation in 2021-22, prior to the scheme re-opening on 1 April 2021. This practice is not permitted as we cannot guarantee funding.
What if the conclusion of missives is delayed for my 2021-22 application?
We are giving applicants longer than 3 months to conclude missives, provided the transaction concludes within the normal 9 month validity period or by 31 March 2022, whichever is earlier.
The First Home Fund will close to new applications once the budget has been exhausted, the Scottish Government has advised they will not be able to provide advance notice on this
Need more information?
To speak with us please call or email:
T: 0800 6526649