In what could easily be some kind of Halloween joke, the Illawarra Mercury this week spruiked a new home deposit scheme that would provide low-to-middle income first home buyers (FHBs) with assistance to get “into the housing game”:
The West Dapto Home Deposit Assistance Program is the first of its kind and is designed to allow low-to-middle-income singles, couples or families to buy a new house or land package in the suburb’s new release area.
The grants will be administered through a partnership between IMB and the council and will be available for loans worth up to $415,000. Funds will be provided to eligible applicants as a 20per cent deposit on an IMB loan and will remain in the council’s name while acting as security against the loan.
Launching the program on Friday, Lord Mayor Gordon Bradbery said he expected a lot of interest in the scheme, which he said would free low-income working families from the burden of saving a huge home deposit.
‘‘This will hopefully allow people on relatively small incomes to find their way into the housing game, which many in our country are struggling to get into,’’ he said. ‘‘We hope to be able to assist at least 123 households over the next three years.’’
Twenty-seven grants will be made available this financial year, with the remaining 96 distributed over the following two years.
Once home owners’ equity in their home increases so the security deposit is no longer needed, the grant money will be released by IMB and recycled to allow other people to participate in the program, which will run until 2026.
The only thing this scheme will do is assist low income borrowers into taking on mortgages that they cannot afford, all the while providing a massive free kick to the West Dapto developer(s), who will be able to sell their product at an inflated price, courtesy of other rate payers.
It is council-backed sub-prime lending, pure and simple.
