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5 things Aussies need to know about the Victorian Homebuyer Fund

·5-min read
Aerial photo of city centre of Geelong in Victoria, Australia. (Source: Getty)
Geelong is one of the elgible locations for the VHF. (Source: Getty)

In October, the Victorian Government announced the launch of the Victorian Homebuyer Fund (VHF) in a bid to help more of the state’s residents buy a home in the hot housing market.

Treasurer Tim Pallas said he expected the VHF would help about 3,000 residents buy a home.

For those interested in getting a foot on the property ladder with the help of the VHF, here are five things they should consider before signing up.

How it works

Suppose an individual is eligible for the fund. In that case, they could receive a contribution of up to 25 per cent towards purchasing a property, allowing them to obtain a home loan with a minimum deposit of 5 per cent while avoiding the need to pay Lenders’ Mortgage Insurance (LMI).

The VHF is a shared-equity scheme, which means the contribution made by the Victorian Government is in exchange for a share or stake in the property.

Homebuyers can opt to buy back the Government’s share in the property over time via refinancing, using their savings or upon sale of the property. The repayments are then directed back to the fund, meaning it is self-sustainable.

Applicants don’t necessarily need to be first home buyers; however, they cannot currently own a property. This is vastly different from the many grants available to Aussies looking to get into the property market.

Aboriginal or Torres Strait Islander applicants only require a 3.5 per cent deposit to apply to secure a contribution of up to 35 per cent.

Eligibility criteria

To be eligible for the VHF, Australians must meet the following criteria:

  • Be an Australian citizen or permanent resident

  • Be at least 18 years of age at settlement

  • Have saved the required minimum deposit (see above)

  • Earn $125,000 or less per annum for individuals, or $200,000 or less per annum for joint applicants

  • Occupy the purchased property as a principal place of residence (i.e. not an investment property)

  • Be a natural person (i.e. not an organisation, company, trust or other body or entity)

  • Not purchase the property from a vendor who is a relative

  • Not own an interest in any land at the time of purchase

  • Not be a shareholder in any corporation (other than a public company) that owns any land in Australia or overseas

  • Not be acting as a trustee of a trust

Region & property requirements

Unfortunately, the VHF is not entirely open for interpretation, which means specific property and region requirements must be met if and when an individual meets the eligibility criteria.

These include only buying property in Victoria, specifically in Metropolitan Melbourne, Geelong, or regional locations such as Ballarat, Bendigo and Mildura.

The full list of eligible suburbs and regions can be found here.

In terms of property type, it must be an existing or new house, townhouse, unit or apartment. This means those looking to buy vacant land or off-the-plan properties are not eligible for the funding.

View over Bendigo city in Victoria, Australia. (Source: Getty)
Bendigo is another regional area where the fund can be accessed. (Source: Getty)

If the property already exists, it must be vacant when purchased. If it is under a lease, it must expire within 12 months of the acquisition date.

The property must cost $950,000 or less in Metropolitan Melbourne and Geelong or $600,000 or less in other eligible locations.

Application process

Those interested in getting a slice of the action can apply via the following process after checking both their eligibility and the eligibility of the property.

  • Gather proof of identification documents, such as a passport, driver licence or birth certificate, as well as proof of income such as payslips, details of expenses, liabilities and assets.

  • Speak with the participating lenders, Bank Australia and Bendigo Bank, to determine if they are suitable for their needs. Once complete, individuals can begin the provisional application process.

  • Find a property and enter a contract of sale once the lender has provided the individual with provisional approval of the VHF. It’s important to note that individuals only have up to six months to enter a contract of sale for an eligible property.

  • Complete the property settlement, which the Government recommends doing with the assistance of a lawyer or conveyancer.

Additional obligations

As part of the agreement and part ownership from the Government, there are a few obligations associated that individuals should be aware of before signing on the dotted line.

Annual reviews

Homeowners will need to complete a yearly inspection and provide supporting evidence to confirm they have maintained their eligibility for the VHF. This documentation can include payslips, tax returns, home loan statements and utility bills.

Property maintenance 

Homeowners must ensure the property is maintained to a reasonable standard. This includes making essential repairs at their own expense and fixing any defects.

No missed repayments

As part of the agreement, homeowners must ensure all repayments associated with the property are completed on time. This includes anything from council rates, utility bills, body corporate fees, stamp duty, homebuyer fund repayments (once a particular threshold is met).


The property must be insured at all times and monitored in the homebuyer’s annual review by the Government.

Brodie Haupt is CEO & co-founder of WLTH

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