Recent Changes to Kāinga Ora Products

Kāinga Ora announced that as of 1pm on 22 May 2024, no more First Home Grant applications would be accepted. This scheme saw many first home buyers receiving $5,000.00 for the purchase of an existing house or $10,000.00 for a new build home. We have outlined the recent changes to the Kāinga Ora products available to First Home Buyers and what that might mean for you.

Since this announcement, the Government has decided to provide exemptions to a limited group of first home buyers if they meet the following criteria:

• You were granted a pre-approval prior to 1pm on 22 May 2024; and
• You had a signed Sale and Purchase Agreement on or before 22 May 2024.
• You have emailed Kāinga Ora before 11.59pm on Friday 14 June 2024 to be considered for an exemption.

In any other case, in order to still be eligible for the First Home Grant you must have:

• Lodged your application with Kāinga Ora before 12.59pm on 22 May 2024;
• be over 18;
• have earned less than the income caps in the last 12 months;
• not currently own any property or land, including property owned by a spouse or de facto partner. Ownership of Māori land is not included;
• have been contributing at least the minimum amount to KiwiSaver (or complying fund or exempt employer scheme) for 3 years or more;
• purchase a property that is within the regional house price caps; and
• agree to live in your new house for at least 6 months.

While it is disappointing that first home buyers will no longer receive financial support through the First Home Grant, there are alternative ways to get a helping hand through the door.

Kāinga Ora offers a First Home Loan product for those with less than the usual 20% deposit required by most banks. This is suitable for those who are able to make regular repayments on a home loan but are having trouble saving for a deposit. With a First Home Loan you only need a deposit of 5%, the loan is then issued by a selected lender and underwritten by Kāinga Ora.

Participating lenders include:

• Westpac
• Kiwibank
• The Cooperative Bank
• SBS Bank
• Unity Money
• NBS
• New Zealand Home Loans

To be eligible for a First Home Loan you must met the maximum income requirement, being:

• $95,000 before tax if you’re an individual buyer;
• $150,000 before tax if you’re an individual buyer with one or more dependents; and
• $150,000 combined income before tax for two or more buyers.

In addition, you will need a deposit that is at least 5% of the purchase price of the house you want to buy, and you must be a first home buyer, or in a financial position that is typical for a first home buyer.

You must also meet your chosen participating lender’s usual criteria, this includes, but is not limited to:

• Your ability to make the repayments;
• Whether the loan is suitable for your situation and future goals;
• How you’ve managed money in the past; and
• Whether you are at least 18 years old.

There are also general rules set by the government, such as:

• You have to pay for lenders’ mortgage insurance (the premium is 0.5% of the loan) and any other fees the lender may charge.
• You must live in the home; it cannot be an investment property.
• You may not own any other property, excluding Māori land.
• You must be a New Zealand citizen or permanent resident, or a resident who normally lives in New Zealand.

Still have questions? Get in touch with us today and our friendly property team will be more than happy to guide you through your first purchase.