38Varying the participants in an arrangement

38  Varying the participants in an arrangement

 (1) Housing Australia must not vary an arrangement:

 (a) so that there are more than 2 participants; or

 (b) to remove all of the original participants.

 (2) Housing Australia may only vary an arrangement by adding a participant where Housing Australia is satisfied that:

 (a) the new participant is an eligible applicant (see section 17), subject to the following qualifications:

 (i) where the variation occurs after the parties enter into the contract of sale, but on or before the settlement date—subparagraph 17(f)(i) need not apply; and

 (ii) where the variation occurs after the settlement date—paragraph 17(f) does not apply; and

 (b) any transactions with the vendor or builder that involve the new participant would be conducted on an arm’s-length basis.

 (3) Housing Australia must not vary an arrangement by removing a participant unless it is satisfied that:

 (a) the relevant participating lender has determined that the participant in the arrangement, as varied, would be able to meet their obligations under the mortgage agreement; or

 (b) it is necessary to do so to enable or facilitate compliance with a court order.

 (4)  This section does not apply in the circumstances mentioned in section 45.

Note: Section 45 provides for the alteration of arrangements in circumstances involving the death of a participant.