THE HEAD START GUARANTEE
The Head Start Guarantee is a world leading innovative solution whereby Head Start Homes provides a pathway into home ownership by acting as guarantor for community housing tenants who can afford a home loan but are locked out due to the need for a large deposit and mortgage insurance. Head Start Homes effectively acts as ‘bank of mum and dad’ for those who face structural disadvantage.
By providing this new pathway Head Start Homes has a multiplier effect on ending poverty as it always helps the following two households at once:
the community housing tenant who needs to overcome structural disadvantage to purchase a home; and
the family or individual on an approved waiting list who is likely to be homeless and moves into the newly vacated community housing home.
How the Head Start Guarantee Works
Community Housing Provider Referral
Community Housing Providers refer community/affordable housing tenants who are deemed to be ready to start their home ownership journey to Head Start Homes.
Prospective participants apply for a Head Start Guarantee.
Head Start Homes assesses suitability and need. Head Start Homes seeks to maximise social return and will consider structural barriers faced by prospective applicants.
Head Start Homes refers nominated potential participants to lenders who provide the Head Start Guarantee (e.g. bank and credit unions). The home loan lender goes through a standard assessment process to determine if a home loan is suitable for the applicant, and confirm the amount that can be borrowed.
Head Start Guarantee Provided
If the loan is approved by the lender then Head Start Homes will act as guarantor and will provide a contribution at the start of the loan directly to the lender as additional security for the loan. The Head Start Homes contribution may enable lenders to lend without a deposit or Lenders Mortgage Insurance. This contribution is released back to Head Start Homes over time as the new home owner pays down their home loan or if the value of the home increases.
The applicant (or home starter) purchases their home.
Prospective participants must:
Be living in a social or affordable housing dwelling, or be on a social housing waitlist
Be eligible for a Health Care Card, Pension Concession Card, or Family Tax Benefit Part A.
Be referred by their Community Housing Provider. Participants must end their housing lease and vacate their property at settlement, returning it to their Housing Provider.
Be able to demonstrate consistent employment.
Meet the lender’s application criteria for a home loan including:
Have 3-5% genuine savings to pay for legal fees and stamp duty
Home loans are caped at $550,000
Equalising access to home finance
No deposit required for a home loan of up to $550,000.
No Lenders Mortgage Insurance
Interest rate discounts and savings
May be available on a range of great home loan products and services offered by our Home Loan Lenders
Support and subsidised and/or discounted access to services
May be offered by our home own partners