Single parents in Australia can now buy homes with just a 2% deposit. Many single parents find that homeownership seems impossible because they struggle to save large deposits while paying family expenses.

The Family Home Guarantee scheme gives single parents a practical way to enter the property market. This government program lets eligible applicants buy property without paying Lenders Mortgage Insurance (LMI), which makes mortgages more affordable. The government has made 5,000 Family Home Guarantees available in the 2025/26 financial year. This is a chance for homeownership that works with the challenges of managing a single-income home loan. These loans remain available through this program to eligible Australian citizens or permanent residents aged 18 and over.

This piece covers everything single parents should know about getting home loans through the Family Home Guarantee. From checking if you qualify to tips that help make homeownership dreams come true.

Understanding the Family Home Guarantee

The Australian Government's Home Guarantee Scheme includes a targeted program called the Family Home Guarantee. This program started in July 2021 to help single-income households get into the property market.

What is the Family Home Guarantee?

Single parents or legal guardians with at least one dependent child can now enter the housing market with much lower upfront costs. The program lets participants buy a home with just 2% of the property's value (plus purchase costs) as a deposit, instead of the large upfront payments traditional mortgages require. Housing Australia backs the deal by giving participating lenders a guarantee that covers up to 18% of the property's value. The government has set aside 5,000 places in this program for the current financial year, which runs until June 2026.

How it helps single parents buy a home

Single parents often struggle with home loans on one income. This guarantee removes the need for Lenders Mortgage Insurance (LMI), which banks usually require when deposits are under 20%. The program works for both first-time buyers and those who've owned homes before, making home ownership available to single parents, whatever their property history.

The guarantee covers homes of all types - houses, townhouses, apartments, house and land packages, and off-the-plan purchases. The program makes it easier for single parents to get suitable housing for their families by lowering the deposit they need to save.

Difference from First Home Guarantee

These two programs differ mainly in their deposit requirements and who can apply. The First Home Guarantee needs a 5% minimum deposit, while single parents can start with just 2% under the Family Home Guarantee. The Family Home Guarantee also helps previous homeowners who are now single parents, not just first-time buyers.

Both programs use the same property price limits in all Australian states and territories. The Family Home Guarantee creates better paths to home ownership that work with single parents' financial situations when they look for home loans.

Eligibility Criteria for Single Parent Loans

The Australian Government has specific rules to qualify for a single parent home loan under the Family Home Guarantee. These rules make sure the program helps people who really need it.

Income and citizenship requirements

The original rules state that you must be an Australian citizen or permanent resident over 18 years old. The income rules are strict - your taxable income must not exceed the limit set for the last financial year based on your Notice of Assessment from the Australian Taxation Office. The good news is that child support payments don't count toward this income cap as these payments are not taxable income.

Who qualifies as a single parent or guardian?

You can apply if you don't have a spouse or de facto partner. People who are separated but not divorced can't apply. You'll need to show that you're either:

• A natural or adoptive parent of at least one dependent child
• A legal guardian taking care of at least one dependent child

Your dependent children should be under 16 and in your care, or between 16-22 and earning below a certain amount of annual income. Children who get disability support pensions and live with you qualify, whatever their age.

Property ownership restrictions

You must not own any property in Australia when you sign the loan agreement. This means no freehold interests, land leases, or company title interests. First-time buyers and previous homeowners who've sold their property can both apply.

Minimum deposit and loan terms

You need at least 2% of the property's value as a deposit. You will also need funds to cover the costs associated with the purchase which may include stamp duty, registration and title fees, lender fees and solicitor fees. The guarantee won't work if your deposit is more than 20%. Your loan must:

• Have principal and interest repayments (with some exceptions for construction loans)
• Run for no more than 30 years
• Be for a property you'll live in

The single parent must be the only name on the loan and property title.

What Properties and Price Caps Apply

The Family Home Guarantee program accepts many property types. The program sets strict price limits to keep homes available and targeted for those who need them.

Types of eligible properties

Single parents can choose from several residential property options through this guarantee program. Here's what qualifies:

• Existing houses, townhouses, or apartments
• House and land packages
• Land with a separate contract to build a home
• Off-the-plan apartments or townhouses

The property must be your primary residence, not an investment. This rule lines up with the program's main goal - helping single parents find family homes rather than investment properties.

Property price limits

Price caps change substantially across Australia based on regional market differences. Major population centres with more than 250,000 people get higher caps. This includes Newcastle, Illawarra, Geelong, Gold Coast, and Sunshine Coast.

Why price caps matter for approval

Price thresholds work as absolute limits. Both the purchase price and the lender's valuation need to stay under the applicable cap. Construction projects that involve separate land purchase and building contracts must have a combined total below the threshold.

These caps determine which properties single parents can think about under the program. Take these steps before setting your heart on a potential home:

1. Use Housing Australia's Postcode Search Tool to check your local price cap
2. Double-check the threshold with your participating lender

This verification step becomes crucial because property values might differ from purchase prices in some cases. These differences could affect your single-income home loan approval.

How to Apply and Get Approved

Getting a single parent home loan through the Family Home Guarantee needs good planning and the right steps. You'll need to connect with financial institutions and get your paperwork ready.

Finding a participating lender

Single parents can't apply to Housing Australia directly. The applications must go through authorised participating lenders. These lenders check if you qualify, help you through each step, and send your application to Housing Australia. Big banks like NAB, Commonwealth Bank, and Bendigo Bank are part of the program, along with other authorised lenders. You'll find a full list of participating lenders on Housing Australia's official website.

Documents you'll need

Getting your documents ready makes the application process smooth. Your lender will ask for:

• Photo ID (passport, driver's license)
• Medicare card number or PMKey (if relevant)
• Last financial year's Notice of Assessment
• A completed Home Buyer Declaration form
• Proof that you're a single parent with dependent children
• Recent pay slips and bank statements
• A list of your regular expenses

Working with a mortgage broker

Mortgage brokers are a great way to get help with your application. They know all about lending rules for single parent mortgages. They also match you with the right lenders, organise your paperwork quickly, and support you from start to finish.

Tips to improve your approval chances

Here's what you can do to boost your chances of getting a single-income home loan:

• Look at your credit score and work on improving it before you apply
• Pay down your existing debts to boost what you can borrow
• Try to save more than the minimum 2% deposit
• Keep your job stable while applying
• Plan your repayments realistically to cover future expense changes

Conclusion

The Family Home Guarantee is changing the game for single parents in Australia who want to own a home. This program helps single-income households deal with their unique challenges in the property market. Eligible parents can buy homes with just a 2% deposit instead of the usual 20%, which removes a big money hurdle.

Single parents find it hard to manage daily costs while saving for big deposits. This program saves them thousands of dollars by removing Lenders Mortgage Insurance at settlement. The program works well for first-time buyers and those who owned property before becoming single parents.

Clear rules exist about property types and price limits in each state to keep homes within reach. Single parents need to meet specific rules about income levels, dependent children, and current property ownership. They must work with approved lenders who submit applications to Housing Australia.

Mortgage brokers are great helpers on this path. They guide single parents through lending rules and connect them with the right banks. Getting ready means collecting documents, checking credit scores, cutting debts, and keeping a steady job.

Even with property prices going up across the country, the Family Home Guarantee gives single parent families a real shot at owning homes each year. The program understands their money situation and offers a way to make their homeownership dreams come true. Single parents can now get stable homes for their families without spending years saving huge deposits.

If you still have questions or would like to find out more about applying for a home loan as a single parent, please don’t hesitate to contact us here at Synergy Mortgage Brokers. 

FAQs

Q1. Can single parents qualify for home loans with government assistance?

Yes, single parents can qualify for home loans through the Family Home Guarantee scheme. This program allows eligible single parents to purchase a home with as little as a 2% deposit, without paying Lenders Mortgage Insurance.

Q2. What are the income requirements for single parent home loans?

To be eligible for the Family Home Guarantee, single parents must have earned no more than the set taxable income limit during the previous financial year. Child support payments are not counted towards this income cap.

Q3. Are there property price limits for single parent home loans?

Yes, there are state-specific property price caps for the Family Home Guarantee program. For example, in NSW, the limit is set for capital cities and regional centres, and a different limit applies for the rest of the state. These caps vary across different states and territories.

Q5. How can single parents improve their chances of home loan approval?

Single parents can improve their chances of approval by checking and improving their credit score, reducing existing debts, saving beyond the minimum 2% deposit, maintaining consistent employment, and setting realistic repayment figures.