The new Single Parent Family Home Guarantee – everything single mums need to know

The new Single Parent Family Home Guarantee – everything single mums need to know

Can my ex apply too? Are my kids too old? What if I owned a house with my ex prior? All you need to know about the new single parent home owner 2 percent deposit scheme

The new government single parent home buyers scheme

On Tuesday the 11th of May, the treasurer Josh Frydenberg will announce a new program to help separated and divorced parents buy a home of their own – the Single Parent Family Home Guarantee. has all the details of this major federal budget initiative ahead of time and we’re sharing them here for you.

By Jason Bryce

About 47 per cent of all single-parent families rent from a private landlord (2017-18 numbers), about double the rate (24 per cent) for dual-parent families.

In 2021-22 the government says around 125,000 single parents with dependants may be eligible for this Family Home Guarantee program with 84 per cent (105,000) of them being single mums plus 20,000 single dads.

The new government single parent home buyers 2% deposit scheme

How does the Single Parent Family Home Guarantee work? 

The Single Parent Family Home Guarantee will support up to 10,000 divorced or separated parents with dependent children and will start on the 1 July 2021. A spokeswoman for Michael Sukkar, the Assistant Treasurer and Minister for Housing, told that extra places may be added to the program if the 10,000 places are exhausted within four years.

This program is based on the First Home Loan Deposit Scheme and has the same property price capsHowever, unlike that scheme, this is not limited to first home buyers, recognising that many single parents may have previously been home-owners. 

The new government single parent home buyers 2% deposit scheme

It allows eligible single parent with dependents seeking to apply for a mortgage loan with a lower deposit than is normally required. The lower deposit is offset with a government guarantee allowing the borrower to avoid the cost of lenders mortgage insurance (LMI).

Only 2 per cent of the price of the home is required by an eligible single parent for a mortgage deposit under this scheme, not the general minimum 5 per cent or the more usual 20 per cent if the borrower wants to avoid the steep costs of LMI.

Am I eligible for the Single Parent Family Home Guarantee? 

Single mums renting need mote assistance

These will be the eligibility tests for the new program:

Income test: Maximum annual income for the FHG is $125,000 (the same as the First Home Loan Deposit Scheme) in the preceding financial year. Child support payments are excluded from this income cap.

Prior Ownership Test: The single parent can’t currently own property but can previously have owned a property. This scheme is not limited to first home buyers.

Citizenship Test: Applicants must be an Australian citizen and must be 18 years or older.

Deposit Requirement: The single parent must have a minimum 2 per cent deposit. That means you must have savings of 2 per cent of the price of the home to be bought. The government will guarantee up to 18 per cent of the property purchase price, allowing the applicant to get a loan without paying LMI.

Owner Occupier test: The single parent is the only person listed on the title and the loan and must live in the home.

Type of Housing: You can purchase a new or existing dwelling worth up to the price caps (listed below).

Can both parents apply for the Family Home Guarantee? 

Can both parents access the scheme?

Yes, both ex-partners of the same children apply for this scheme according to the spokeswoman for the Assistant Treasurer. You don’t need to show 50 per cent or more care of the child(ren) but you will need to demonstrate some care/custody of the children. The spokeswoman suggested at least 10 per cent might be required.

Are my children young enough for me to qualify for the Single Parent Family Home Guarantee?

This scheme adopts the definition of a dependent child that is contained in the Social Security Act. This means a dependent child is:

  1. under 16 where the adult is legally responsible for child’s day to day care, welfare and development or
  2. aged 16-21 and wholly or substantially dependent on their parent and does not earn more than $6,403 in a financial year.

How old you single mum's kids need to be

What are the property price caps for the Single Parent Family Home Guarantee?

Family Home Guarantee Price Caps 

State/ TerritoryCapital city and regional centreRest of state

You will need two per cent of the property price of the home you want to buy to be eligible to participate in this scheme.

Which banks and lenders can provide Single Parent Family Home Guarantee loans?

Australian banks

To access this program, you need to apply directly to one of the banks, credit unions or lenders listed below. The lender will help you access the guarantee when you first apply for a loan. You may also use a mortgage broker, who will go through one of these lenders as well:

National Australia Bank
Commonwealth Bank of Australia
Australian Military Bank
Auswide Bank
Bank Australia
Bank First
Bank of us
Bendigo Bank
Beyond Bank Australia
Community First Credit Union
Defence Bank
Gateway Bank
G&C Mutual Bank
Indigenous Business Australia
MyState Bank
People’s Choice Credit Union
Police Bank (including the Border Bank and Bank of Heritage Isle)
P&N Bank
Queensland Country Credit Union
Regional Australia Bank
Sydney Mutual Bank and Endeavour Mutual Bank (divisions of Australian Mutual Bank Ltd)
Teachers Mutual Bank Limited (including Firefighters Mutual Bank, Health Professionals Bank, Teachers Mutual Bank and UniBank)
The Mutual Bank
WAW Credit Union

The Pros and cons of the Single Parent Family Home Guarantee 

Many single mums can't afford to buy a home

The pros: 

Single mums (or dads) exiting a relationship with some savings, or splitting up assets, and in permanent employment, will be able to use this program to buy a home, at the cheaper end of the market.


Susan, a single mum in Sydney has some savings and earns $80,000 per year.

Susan is looking at small home in the western suburbs worth $690,000. She will need $13,800 as a 2 per cent deposit, plus money to pay for legal fees, reports and other extras if she is successful in getting a place in this program.

Without this program, Susan would require a minimum of $34,500 for a 5 per cent deposit but more usually she would need a 20 per cent deposit of $138,000 to avoid LMI.

Terese Edwards from the National Council of Single Mothers and their Children says yes, a scheme to help mums buy into the property market is welcome.

“This will help a small proportion of single mothers,” said Terese.

“This will address an issue for a small niche of parents and for those people it is potentially life changing but it’s not a panacea for the current housing crisis for single parent families.”

Most single mums don't have enough income to own their own home

The cons: 

You still need to be able to successfully apply to a bank or credit union for a mortgage loan to be eligible for this program.

The government guarantee covers 18 per cent of the loan amount, meaning you can avoid the cost of LMI, but that 18 per cent won’t be paid for by the government. It will be added to the loan, meaning you need to repay that extra amount.

Most single parents will simply not have enough secure income from employment to get a loan.

Many other single parents will not have even a 2 per cent deposit for a mortgage loan.

300,000 single parents received the now-ended coronavirus supplement, meaning they are reliant on income support from Centrelink. These people will not be able to access this program.

The scheme only applies to higher income single mothers

Dr Cassandra Goldie, the chief executive of the Australian Council for Social Services said the government is prioritising subsidies for home renovations and ownership which benefit higher wealth households.

The government is doing this “whilst refusing to invest in social housing,” said Dr Goldie, “yet, even before the pandemic, older women were the fastest growing group of people facing homelessness.”

“The Government should create a fairer future for women, with priority given to women and their families with the least economic security, in insecure housing and/or at risk of gender-based violence.”

Terese Edwards said she had suggested to the minister that single parents currently renting public and community housing be given the opportunity to buy their home. She also suggested that income support for single parents needs to be lifted by twenty per cent.

“A lift in income support by 20 per cent would have a significant impact on the housing crisis that have now.

“This is a worthy measure for a small group of people but it won’t touch the mass of single parents because of the inadequacy of income support and the shortage of affordable housing.”

Single mother Barbara Bryan from said this program doesn’t recognise the problem of lack of income support for single parents.

“The big hurdle facing single mums who want to buy a home isn’t the deposit amount, it’s the lack of government income support for single mothers.”

Jason Bryce

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Will this new scheme benefit you? Or is buying your own home financially impossible? Comment below!Australian Single Mum Support Group

The new Single Parent Family Home Guarantee – everything single mums need to know

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