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HomeStart loan help on housing ladder

bulls-eye-magnifingglass.jpgNearly 12,000 first or second-home buyers in Canterbury will have access to National's KiwiSaver HomeStart grant over the next five years, Housing Minister Nick Smith says.

Smith and Social Development Minister Paula Bennett were in Christchurch this week, partly to detail the Canterbury component of the new housing policy for KiwiSavers.

Under HomeStart, the grant for first-time buyers building new in Canterbury would rise from $10,000 for a couple to $20,000, Smith said. In Christchurch, Waimakariri and Selwyn, property value limits that set eligibility for the grant would increase from $350,000 to $450,000.

The KiwiSaver first home scheme was last year accessed by more than 600 Cantabrians but the new HomeStart criteria could cater to nearly 12,000 over the next five years, Smith said.

It was hard to find well-built, well-located homes for $450,000 in the region's new subdivisions, he said. "There's no question, in my view, that Canterbury families are going to be able to have access to good quality, realistic homes with that new house price limit of $450,000."

There would also be provision for "second-chance" home buyers, Smith said.

"Let's say you're an earthquake victim that didn't have insurance, or you had insurance but you're under-insured, or you no longer own a home for whatever reason . . . providing your equity is less than 20 per cent of the new target [$90,000], you are able to have access to the HomeStart scheme."

People would be in this "hard luck" category for a number of reasons, Smith said. A marriage may have split up, for example, forcing a house sale and leaving the owners short of a deposit on a new home.

National had a "broader concern" that too much new housing stock was in the expensive end of the range, putting homes out of first-timers' reach, Smith said.

The new eligibility terms would give first-home owners a bigger deposit through the $20,000 HomeStart grant, so house builders would "now be trying really hard" to price below $450,000 to capture that market, he said.

These buyers would also be eligible for a Welcome Home loan exempt from the Reserve Bank's loan to value ratio limit (LVR). They would be able to raise a loan with a 10 per cent deposit rather than the 20 per cent required under LVR, Smith said.
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