Equity Loan
If you can't afford to buy without help and:
- you earn £60K per year or less
- you have money for a deposit, legal fees and stamp duty
- you are employed on a permanent contract (or if you're self-employed have 3 years worth of accounts)
- you are not currently a home owner or have your name on a mortgage
- you have a good credit history.
We are prioritising the following:
- Existing social tenants; and also on equal priority ranking
- Serving military personnel; and then:
- Local priorities as set by Local Authorities.
After these priority groups have been exhausted other first time buyers who fit all other criteria can apply and purchase through the Shared Equity Scheme.
FirstBuy and HomeBuy Direct are Government funded products, funding is allocated via the Homes and Communities Agency and administered via a network of Local HomeBuy Agents.
The administration of FirstBuy and HomeBuy Direct is free of charge to applicants, there is no administration charge and all applicants are processed in date order.
Certain unofficial websites are promoting a fast track/priority services at a cost to applicants, please be advised that these websites are not part of the government scheme and do not work in partnership with the HCA’s network of Local HomeBuy Agents. Your Local Homebuy Agent is responsible for approving applicant eligibility and prioritising applicants. Please be advised that any payments for priority or fast track services is at an applicants own risk and does not provide any further guarantees that you will be successful on the FirstBuy or HomeBuy Direct Scheme.
How does it work?
As part of the Government's low cost home ownership initiative, Equity loans aim to make more new affordable homes available. There are two equity loan schemes - HomeBuy Direct and FirstBuy HomeBuy.
What is HomeBuy Direct?
Eligible applicants will be offered an equity loan of up to a maximum of 30% of the purchase price based on the full market valuation of the property.
You are required to fund at least 70% of the purchase price by means of a conventional mortgage, savings and any deposit where required. You must obtain your conventional mortgage from a Qualified Lending Institution
.
For the first five years there is no fee charged on the equity loan. At the start of year six a fee is collected of 1.75% of the market value of the property at the time the loan is entered into multiplied by the outstanding percentage under the equity loan, rising after year 6 at RPI + 1% p.a.
The equity loan is provided by the HCA and developer as a second charge. Further information on HomeBuy Direct is available on the HCA’s website
What is FirstBuy?
Eligible applicants will be offered an equity loan of up to a maximum of 20%*of the purchase price (based on the open market value) The registered provider (this could be a housing association or a private developer) will hold the second charge on the property.
You are required to fund at least 80% of the purchase price by means of a conventional mortgage, savings and any deposit where required. You must obtain your conventional mortgage from a Qualified Lending Institution
.
For the first five years there is no fee charged on the equity loan. At the start of year six a fee is collected of 1.75% of the market value of the property at the time the loan is entered into multiplied by the outstanding percentage under the equity loan, rising after year 6 at RPI + 1% p.a.
Please note that the 1.75% (at year 6) is a FEE and will not repay the loan. When you are ready to repay the loan this can be arranged for you.
The equity loan is provided by the HCA and developer as a second charge.
To see where the equity loan homes are, browse our
FirstBuy Development List.
If you have bought your home through the Equity Loan Scheme and you need information on re-mortgaging please go to www.myfirsthome.org.uk
For full details about Equity Loans visit the Homes and Communities Agency website.