The Family Home Guarantee (FHG) is an Australian Government initiative that helps single parents and single legal guardians with at least one dependent child purchase a home with as little as a 2% deposit — without paying Lenders Mortgage Insurance (LMI). The government guarantees up to 18% of the purchase price, filling the gap between your deposit and the standard 20% threshold.
How the Family Home Guarantee Works
Under the Family Home Guarantee, Housing Australia (formerly the National Housing Finance and Investment Corporation) acts as guarantor for up to 18% of the property purchase price. This means:
- You only need a 2% genuine savings deposit
- You do not pay Lenders Mortgage Insurance (LMI), which can save $10,000–$30,000+ depending on the loan size
- The guarantee is not a cash grant — it is a government-backed guarantee that reduces lender risk
- Your loan is standard in all other respects; you still pay the full purchase price via your mortgage
The Family Home Guarantee is administered through a network of participating lenders, including major banks and a selection of non-major lenders. Not all lenders participate, which is why working with a mortgage broker is highly recommended to navigate your options.
Eligibility Requirements
Who Can Apply?
- Australian citizens aged 18 or over
- Single parents or single legal guardians with at least one dependent child
- You do not need to be a first home buyer — the FHG is also available to previous homeowners
- If applying as a couple, only one applicant needs to be a single parent (though the scheme is designed for single applicants)
Income Caps
- Your taxable income must not exceed $125,000 per year (based on the prior financial year’s tax return)
Property Price Caps by State and Territory
The property you purchase must not exceed the price cap for the area. Current thresholds (2024–25) are:
- NSW — Sydney: $900,000
- NSW — Rest of state: $750,000
- VIC — Melbourne: $800,000
- VIC — Rest of state: $650,000
- QLD — Brisbane: $700,000
- QLD — Rest of state: $550,000
- WA — Perth: $600,000
- SA — Adelaide: $600,000
- TAS — Hobart: $600,000
- ACT: $750,000
- NT: $600,000
Both new and existing homes are eligible, as are house-and-land packages and off-the-plan purchases.
How to Apply
You cannot apply directly to Housing Australia — applications are lodged through a participating lender or mortgage broker. The process is:
- Confirm your eligibility (income, dependent children, citizenship)
- Contact a participating lender or mortgage broker who works with FHG-accredited lenders
- The lender checks your eligibility with Housing Australia and reserves a guarantee place
- You proceed with a standard home loan application
- Once approved, you can purchase a property within the price cap
Guarantee places are limited each financial year — early application is strongly recommended. Lagos Financial works with multiple FHG-participating lenders and can help you secure a place.
Family Home Guarantee vs. First Home Guarantee
| Feature | Family Home Guarantee | First Home Guarantee |
|---|---|---|
| Minimum deposit | 2% | 5% |
| Who can apply | Single parents/guardians | First home buyers |
| Previous homeowners eligible? | Yes | No |
| Income cap (individual) | $125,000 | $125,000 |
| LMI waived? | Yes | Yes |
Frequently Asked Questions
What is the Family Home Guarantee?
The Family Home Guarantee is an Australian Government scheme that allows single parents and single legal guardians with at least one dependent child to buy a home with just a 2% deposit. The government guarantees up to 18% of the purchase price through Housing Australia, eliminating the need for Lenders Mortgage Insurance. Unlike a grant, it does not give you money — it reduces the deposit required to enter the market.
Can I buy an existing home?
Yes. The Family Home Guarantee applies to both new and existing residential properties, provided the purchase price is within the applicable state or territory price cap. You can buy an established house, apartment, townhouse, or other residential dwelling. House-and-land packages and off-the-plan purchases are also eligible.
What are the property price limits?
Property price caps vary by location. In Sydney, the cap is $900,000; in Melbourne, $800,000; in Brisbane, $700,000. Regional and other state areas have lower caps. These thresholds are reviewed annually by the government. Your mortgage broker can confirm the current cap for your target area before you start searching.
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Lagos Financial offers a full range of mortgage broking services:
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We serve clients in Sydney, Brisbane, Launceston, and Australia-wide.
About the Author
Victor Lagos is a licensed mortgage broker (ACL 546774) and founder of Lagos Financial, with close to 20 years of finance industry experience since beginning his career at Bluestone Mortgages in 2006. A member of the Finance Brokers Association of Australia (FBAA) since 2015 and the Australian Financial Complaints Authority (AFCA — 98399), Victor helps Australians build wealth through tailored home loan and property investment strategies, working with 60+ lenders nationwide. Last reviewed: March 2026.