Single parents will be backed to buy their own home with just a 2 per cent deposit under a new scheme to be announced in the Federal Budget on Tuesday.
Dubbed the ‘Family Home Guarantee’ the new scheme aims to help single parents enter the housing market.
From July, single parents with dependent children will be able to buy a home with a deposit of just 2 per cent with the government guaranteeing the remaining 18 per cent.
“This is giving an opportunity to single parents with dependents with a household income under $125,000 to get into home ownership,” Frydenberg said.
“We will go further based on the success of this program.”
The Morrison Government is also providing an additional $124.7 million in funding which will allow the states and territories to bolster public housing stocks.
"The Government understands the importance of owning your own home and the significant economic and social benefits home ownership provides," Frydenberg said.
Supporting more Australians to own their own home is part of the Government’s economic plan to secure Australia’s recovery.
The move comes after the successful First Home Loan Deposit Scheme which was aimed at first home buyers.
Treasurer Josh Frydenberg said housing will be a centrepiece of the Federal Budget on Tuesday.
“The Family Home Guarantee recognises that the challenge of saving a deposit is even harder when you’re on a single income while raising children,” Frydenberg said.
The new Family Home Guarantee will support up to 10,000 single parents.
Additionally, Frydenberg announced the government will lift the amount that can be released under the First Home Super Saver Scheme from $30,000 to $50,000.
Another 10,000 places will be added under the First Home Loan Deposit Scheme in what is being called the New Home Guarantee, which will be confined to those building a new home.
This comes as the housing market has become more difficult to access for first home buyers with prices soaring over 500 per cent in the last 25 years.
Commonwealth Bank chief executive Matt Comyn welcomed the announcement acknowledging it can be challenging for single parents to support their family and save for a home deposit.
"This announcement will come as a welcome relief for hard working single parents, particularly those working in essential services such as education, health care and public safety, looking to buy their first home or re-enter the property market," Comyn said.
NAB group executive personal banking Rachel Slade said the bank was also strong supporters of the scheme.
“We’re excited by the new initiative for single parents, recognising that buying a home is often a major challenge for Australians on a single income," she said.
"We expect the Family Home Guarantee will provide hope and build confidence for single parents to enter, or in some cases re-enter, the property market."