Family Home Guarantee: 2% Deposit for Single Parents

What is the Family Home Guarantee?

It is the single parent stream of the Australian Government 5% Deposit Scheme. "Family Home Guarantee" is its current legal name, not a former one.

The 1 October 2025 rebrand did not change the legal names, and the 1 July 2026 guide for single parents still labels its first section "Family Home Guarantee". Bendigo Bank's and NAB's old family home guarantee addresses now open their pages on the scheme.

The guarantee protects the lender, not you. If you default and the sale of the home does not cover the debt, Housing Australia pays the lender the shortfall up to the agreed limit. You receive no cash, and you could still owe money after a sale.

It is not a family guarantee loan

In a guarantor home loan, a relative offers equity in their own home (or cash, at some lenders) as extra security. Under the Family Home Guarantee no relative signs anything and no one else's home is used. The government is the guarantor.

Who is eligible for the Family Home Guarantee?

A single parent or single legal guardian of a dependent child, who is an Australian citizen or permanent resident aged 18 or over, has a deposit of 2% to under 20%, and will live in the home.

If you qualify as both a first home buyer and a single parent, you must apply as a single parent. The official FAQ mentions only the 16 to 22 age group; the guide and the law also cover children under 16.

Eligible homes: an existing house, townhouse or apartment, a house and land package, vacant land with a separate fixed-price build contract with a licensed builder, or an off-the-plan home. Land you already own before you secure a place does not qualify.

Price caps

Both the price and the lender's valuation must be at or under the cap. Capital cities and regional centres use the higher cap. Regional centres are, in NSW, the Central Coast, Coffs Harbour to Grafton, Illawarra, the Mid North Coast, Newcastle and Lake Macquarie, and Richmond to Tweed; in VIC, Geelong; in QLD, the Gold Coast and the Sunshine Coast. In the NT the higher cap is for Darwin. Every other state and territory is in the price cap table on the 5% Deposit Scheme page.

What if you own a home now, or with an ex-partner?

You can still apply, but you cannot keep other property. Either you stop holding it within 4 weeks of becoming the owner of the new home, or you buy out your co-owner of the home the loan is for.

The rule covers any freehold interest, a lease of 50 years or more, or company title in Australia: residential or commercial, investment or owner-occupied, held alone or with a former partner. The Investment Mandate allows two exceptions:

1. Selling. You intend to give up the other property within 4 weeks of becoming the registered owner of the new home. If you still hold it after 4 weeks, the guarantee must end.
2. Buying out a co-owner. You own the home as a joint tenant or tenant in common, and the loan makes you its sole registered owner. This lets a single parent buy out a former partner's share of the family home.

The other rules still apply. If you were married to your former partner, you must be divorced, and the lender's valuation must be at or under the cap.

How much can you borrow with a 2% deposit?

Up to 98% of the lender's valuation. By law the guarantee covers your loan less 80% of the value, which is 18% of the value when you put in 2%.

Your loan-to-value ratio (LVR) is the loan as a share of the property's value.

A larger deposit shrinks the guarantee: with 10% down, the limit falls to $50,000 (our arithmetic). The 2% is of the valuation, not the price, so a low valuation can mean a larger deposit or a smaller loan.

From those figures, our arithmetic gives Simone a loan of $686,000 and a guarantee limit of $126,000.

Could you buy with 2% and pay LMI instead?

No. The lenders and insurers we checked stop at 95% of the value with LMI, before any premium is added, so without the guarantee you would need at least 5%, plus the premium.

Housing Australia reports that the median Family Home Guarantee loan in 2024-25 was at 96% LVR, above every LMI ceiling we found. Our calculator gives no LMI estimate at 98% either: the lender-published figures it uses stop at 95% LVR.

The LMI route needs $15,000 more saved and a premium of about $20,000. Added to the loan, that premium goes past CommBank's 95% ceiling, which includes LMI. Queensland adds 9% duty to the premium, taking the top of the range to $27,200. Check your own figure with the LMI calculator.

Is there an income cap or a limit on places?

Neither, since 1 October 2025. The $125,000 taxable income cap and the limit of 5,000 places a year were both removed that day.

Broker pages that quote the $125,000 cap or the 5,000 places, or say permanent residents cannot apply, are out of date. The Regional First Home Buyer Guarantee closed to new guarantees on 1 October 2025, so single parents in regional areas use this stream.

Before the change, in 2024-25, only 1,088 of 5,000 places were taken (22%). The median single parent borrower bought at $475,000 on a household income of $79,000, was aged 35 to 39, and was a woman in 83% of cases (Housing Australia, 2024-25).

What happens after you buy?

The guarantee stays while you live in the home and leave the loan as it is. It ends when your scheduled balance falls to 80% of the value, or earlier if you sell, move out, rent it out, borrow more or refinance away from a Participating Lender.

• Living in it. No renting. The law lets Housing Australia accept a move your employer requires (after at least 12 months with them), serious illness or caring for someone seriously ill. Ask your lender first.
• A new partner. We found no rule that ends the guarantee if you re-partner, because being single is tested when you sign the loan. The guide's example is a single father who moves in with a new partner: he cannot rent out his home. No official document we read covers adding a partner to the loan or title, so ask your lender first.
• Borrowing more. Not permitted. Minor changes, such as a rate change or another standard product with the same lender, are possible.
• Refinancing. Allowed to another Participating Lender, keeping the guarantee, if you do not increase the loan or extend the term.
• Reaching 80%. Only scheduled repayments count; extra repayments you can redraw do not.

If the guarantee ends while your LVR is above 80%, your lender may charge LMI or other costs.

Family Home Guarantee, Help to Buy or a 5% LMI loan?

The guarantee has no income cap and accepts permanent residents. Help to Buy leaves a smaller loan but has an income cap, is for citizens only and takes a share of the home's value. LMI needs 5% and a premium.

You cannot combine the guarantee with the Help to Buy scheme. First home buyers without children use the 5% Deposit Scheme with 5%, and every other route is in how to avoid LMI.

Which lenders offer the Family Home Guarantee?

The 5% Deposit Scheme's Participating Lenders: 54 on the official list on 29 September 2026, with no split by stream.

Housing Australia can set lender rules per stream, so ask whether your lender writes single parent loans; NAB, ANZ and Bendigo Bank say they do. Apply through a lender or its representative, such as a broker. Once pre-approved, you have 90 days to find a home and sign a contract. Check the Participating Lenders list first.

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