For many first time buyers, affordability can be a barrier to getting onto the housing ladder but with the help of the Scottish Government's “First Home Fund*”, your dream CALA home could be more affordable to you than you thought.
What is the First Home Fund?
The First Home Fund is a Scottish Government scheme to help first time buyers purchase their first home. It provides up to £25,000 as an equity loan or 49% of the purchase price (whichever is lower) towards the purchase of both newly build and existing properties in Scotland.
How does it work?
In order to take part in the scheme, you will be required to provide a minimum deposit of 5% of the purchase price (subject to individual lender requirements) and your mortgage must be at least 25% of the purchase price.
Buying through a shared equity scheme means you split the cost of purchasing the property with the Scottish Government. You will fund your share through a deposit and a mortgage, with the remaining share provided by the Scottish Government.
Although the Scottish Government will have an equity share in the property, you will own the property outright. There are no monthly payments to be made towards the Scottish Government and no interest will be charged.
|Property valuation and purchase price:
| 5% Deposit:
| 85% Mortgage:
|10% First Home Fund Equity Share:
†Please note that lenders will have their own individual requirements when providing a mortgage. The lender or a mortgage advisor will be able to fully explain these requirements to you.
You will normally repay the Scottish Government’s percentage equity share when you sell your home, however you can choose to pay this off earlier or choose to increase your equity share over time.
As an example, if your deposit and mortgage pays for 90% of your home’s value when you buy, the Scottish Government will hold a 15% share. This means that when you sell, you will receive 90% of the final sale price and the Scottish Government will receive 10%.
This does not mean that the Scottish Government has an ownership right to the property. You will own the property outright and hold the full title.
Who is it for?
The scheme is open to all first-time buyers in Scotland who are taking out a mortgage. A first time buyer is anyone who does not own, or has previously owned, a property (as either a sole or a joint owner) in Scotland or anywhere else in the world.
While the scheme is open to all first-time buyers there are a few requirements that you will need to be aware of:
- There is a limit of one application per property. You can submit a joint application, however, you will be limited to one award of £25,000.
- Your mortgage must be at least 25% of the purchase price.
- Your mortgage must be capital repayment.
- The property must be the sole residence of all applicants. The scheme is not available for buy-to-let properties.
- You cannot apply to other Scottish Government shared equity schemes (e.g. Help to Buy (Scotland) Affordable New Build, Help to Buy (Scotland) Smaller Developer, New Supply Shared Equity or Open Market Shared Equity) while also applying to this scheme. If you have an open application to any other shared equity scheme in Scotland you must withdraw this before you apply to this scheme. However you are able to use a Help to Buy: ISA or Lifetime ISA to go towards your deposit.
We would strongly recommend that you consult with an Independent Financial Adviser before applying to the scheme. We work with a panel of independent financial advisers who we can put you in touch with for further information and guidance. Please ask a CALA representative at your nearest development.
Download our First Home Fund leaflet
Click here for further information on the First Home Fund.
*For full terms and conditions, click here.