Kāinga Ora has recently introduced the First Home Partner scheme to assist first home buyers who don’t quite have the funds to purchase a property themselves.
Under the First Home Partner scheme Kāinga Ora will purchase the home with you. They will contribute funds to the purchase, and they will also be a registered owner of the property. You will live in the home and over time, will purchase Kāinga Ora’s share in the property.
Who is Eligible for the First Home Partner Scheme?
You must be able to contribute at least 5% of the purchase price and you must be able to receive a home loan from a bank who participates in the First Home Partner scheme. There are additional requirements you will need to meet which can be found on Kāinga Ora’s website. For example, you must have a total household income of no more than $130,000.00 before tax, be a first home buyer and commit to living in the property for at least three years from the settlement date.
Pre-Approval and the Commitment Agreement
The first step is to submit a pre-approval application with Kāinga Ora. If your application is successful Kāinga Ora will provide you with an eligibility confirmation letter and a Commitment Agreement. The eligibility letter will set out the estimated amount that Kāinga Ora will contribute to your purchase. The Commitment Agreement is between you and Kāinga Ora. It sets out what you must do before and after submitting an offer on a property. The Commitment Agreement must be signed and returned to Kāinga Ora before you can make an offer on a home. We suggest you obtain legal advice on the Commitment Agreement, and this is something we are happy to assist with. You will also need to provide Kāinga Ora with a pre-approval letter for your home loan at this point.
The Sale and Purchase Agreement
The property must be either:
- A new build – A property that has not been occupied and which has received a Code Compliance Certificate in the past 12 months; or
- ‘Off the plans’ – A property that you are purchasing before construction is complete.
Before you submit an offer on a property, you will need to check the Sale and Purchase Agreement meets Kāinga Ora’s requirements. We will review the Sale and Purchase Agreement for you and let you know if any changes are required. Kāinga Ora will also want to review the Agreement before they sign it as co-purchaser.
As you are purchasing the property with Kāinga Ora, all instructions in relation to confirming conditions and requesting changes to the Agreement must come from both you and Kāinga Ora.
Once the Agreement is unconditional, Kāinga Ora will provide us with a Shared Ownership Agreement and various other documents.
Purchasing Kāinga Ora’s Share
The Shared Ownership Agreement is between you and Kāinga Ora as co-owners. It sets out your relationship and obligations as co-owners and also how you can purchase Kāinga Ora’s share in the property i.e. in one lump sum payment or in small payments over time. We will advise you on the Shared Ownership Agreement and discuss it with you in detail when you come to the office to sign the loan documents and transfer documents. Kāinga Ora must also sign the Shared Ownership Agreement and transfer documents before settlement can be completed.
There are many additional steps when purchasing a property using the First Home Partner scheme. We are familiar with these steps and will guide you through the process to owning your first home.
