What is First Home Partner?
First Home Partner is a shared ownership scheme to help aspiring first home buyers whose deposit and home loan aren’t quite enough to buy a home that meets their needs, purchase a home together with Kāinga Ora.
The way this works is that Kāinga Ora bridge the gap up to 25% of the value of the property, or up to $200K, whichever is the lower amount. You will need to meet the lending requirements of a participating bank to receive a home loan (we can help with that!) and be able to contribute a minimum of 5% of the purchase price of the home you are interested in buying (see below for more information about deposits).
For example, you may have saved 10% of the purchase price of a home and a participating bank is willing to lend you 75%. Kāinga Ora then contributes 15% to purchase the home with you in return for a 15% share of ownership in the home.
How is buying a home with First Home Partner different?
Shared ownership won’t feel very different from full home ownership from day-to- day. You are the majority homeowner, and Kāinga Ora will not use or occupy your home.
However, there are some important differences you should consider
Kāinga Ora will share ownership of the home with you as co-owner on the title
the shared ownership relationship between you and Kāinga Ora is governed by a Shared Ownership Agreement
you commit to living in the home as your primary place of residence for at least three years from settlement
you meet annually with a Kāinga Ora Relationship Manager to review the financial circumstances of your household and work towards the goal of achieving full home ownership
you will need to do your best to purchase the share of the home owned by Kāinga Ora within the first 15 years of ownership and must have purchased the share in full by the 25th anniversary from the date of settlement on the home
you will need to seek permission from Kāinga Ora before making improvements or renovations, or if you want to sell your home.
Are you eligible?
To be eligible for First Home Partner, you must:
be over 18 years old
be a New Zealand citizen, permanent resident, or a resident visa holder who is “ordinarily resident in New Zealand”; OR be applying with someone who meets the citizenship or residency requirements, and you are married to or in a civil union or de facto partnership with that person
have a total household income before tax of no more than $130,000
have a good credit rating (subject to a credit report)
be a first home buyer
not previously received shared ownership support from Kāinga Ora
You must be buying the home for you to live in and commit to living there as your primary place of residence for at least three years from your settlement date, and plan to be able to take full ownership of the property within 15 years of settlement date.
We can help you make a plan to ensure you're in a position to do so within that time!
Can I buy any type of home?
Kāinga Ora have set some specific criteria for the type of property you need to purchase under the scheme.
Homes eligible for First Home Partner must be:
a ‘brand new’ build - this means the home is a new build that has not been previously occupied (other than by the developer or builder), and has received a Code Compliance Certificate within the previous 12 months; OR
purchased 'off the plan' - this means that you are purchasing a new home before construction is complete. The house and land must be purchased together on a single Sale and Purchase Agreement. First Home Partner does not support scheduler payments or construction loans
habitable from the date of settlement or from the relevant completion date once the Code Compliance Certificate/title has been issued
assessed in accordance with the bank’s own credit standards
You must also be buying the home for you to live in and commit to living there as your primary place of residence for at least three years from your settlement date. If your personal circumstances change that require you to move or sell your home within this three-year period, then you will need to discuss this with Kāinga Ora.
As part of your application, they will assess your circumstances and areas you are interested in buying, and provide guidance to help you find a suitable home for the needs of your household.
Once you have identified an eligible property that you can afford, you will need to contact them to confirm the property satisfies the conditions outlined in your Commitment Agreement and begin the process of co-purchasing the home.
Where could I source my deposit?
You'll need to provide evidence that you have a minimum contribution of 5% toward the purchase price of the home you want to buy.
This can include money:
that you have saved in the bank
from your KiwiSaver first-home withdrawal
from a First Home Grant approval
gifted to you by a family member
If you are using gifted money, you will need to supply a completed gift declaration which we've put a copy of below for you.
Ready to apply?
With First Home Partner, you need to apply to Kāinga Ora for approval to be part of the scheme.
Applying for pre-approval will confirm that you meet the First Home Partner eligibility criteria and get an estimate of what Kāinga Ora’s contribution to a home purchase may be.
Generally Kāinga Ora will process your application within five working days, and once you receive approval, it's valid for 6 months
Once you have received approval from Kāinga Ora, we can work together on a bank application to confirm you can borrow the remaining funds.
Check out our application form here, or get in touch with us to chat through your situation, we're always happy to help!
-The My Mortgage Team