Government extends community housing fund

Budget 2010 provides $20 million to extend the Housing Innovation Fund for another year and continues other measures to improve housing affordability for New Zealanders, Housing Minister Phil Heatley says.

“The Government’s decision to extend the fund for another year, at a time when resources are tight, demonstrates our on-going commitment to growing the supply of affordable housing for New Zealanders and their families.

“Housing New Zealand’s Housing Innovation Fund combines private and public resources - making everyone’s dollar go further and delivering benefits to those in housing need,” Mr Heatley says.

Budget 2010 sets aside $16 million for grants and loans to support social and affordable housing and a further $4 million to cover loan impairments.
This investment by the Government complements its efforts to expand the reach of other services to improve housing affordability for New Zealanders.

In the past year, the Government has:

• Extended the Welcome Home Loan

The Welcome Home Loan limit has been extended for first home buyers in higher priced areas of New Zealand and those wanting to build houses on multiple-owned Māori land.

The amount that can be borrowed under the Crown-funded mortgage insurance scheme has been increased from $280,000 to $350,000 for first home buyers living in higher-priced areas.

From 1 July 2009 to 30 April 2010, a total of 1528 Welcome Home Loans have been settled, which translates into access to home finance of $320 million for almost 2500 New Zealanders.

The Government has also developed the Kāinga Whenua loan in partnership with Kiwibank for Māori building on multiple-owned land.

With a Kāinga Whenua loan, Kiwibank can lend 100 per cent of house building costs or the purchase price of the house, up to $200,000 - as long as the borrower has a licence to occupy the land, a valuation from a registered valuer and a satisfactory building contract.

No deposit is required for a loan below $200,000.

• Introduced the tenant home ownership programme

In September 2009, the Government began offering tenants who aspire to own their own home the opportunity to buy the state house they live in.

As at 4 May 2010, 17 state houses have been sold. Another eight sale and purchase agreements are waiting to go unconditional or settle.

Housing New Zealand will direct the funds from these sales into replacement properties in high demand areas as quickly as possible.

• Supported the delivery of two KiwiSaver home ownership features

KiwiSaver has two features to help its members buy a home, land to build a house on, or buy an apartment that is being built - the KiwiSaver first-home deposit subsidy and the KiwiSaver first-home withdrawal.

Eligible KiwiSaver members will be able to apply for the subsidy or withdrawal from 1 July 2010.

The first-home deposit subsidy is a tax-free grant of $1000 for each year of contribution to the scheme after three years, up to a maximum of $5000. About 300 KiwiSaver members will receive the deposit subsidy in 2010/11, rising to about 1000 members a year from 2011/12.

After three years membership of a KiwiSaver scheme, or a complying scheme, KiwiSaver members can also withdraw all or part of their savings (but not the Government contributions) to put towards buying their first home.

ENDS

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