29CEligible loan

29C Eligible loan

(1) A loan is an eligible loan if: (a) subsection (2) or (4) applies; and (b) any criteria and processes established by Housing Australia for the approval of eligible loans are satisfied. (2) Subject to subsections (2A) and (2B), this subsection applies to a loan for which all of the following are satisfied at the time the loan agreement is entered into: (a) the loan is made by an eligible lender; (b) there are no more than two borrowers under the loan agreement; (d) each borrower under the loan agreement is an eligible home buyer; (e) the loan is for the purchase of residential property; (f) where the loan relates to the purchase of an interest in land on which a dwelling is not affixed, and the construction of a dwelling on the land, the loan also relates to the construction of the dwelling; (g) the value of the residential property does not exceed the price cap for the area in which the property is located; (h) the residential property that is the subject of the loan is to be owner-occupied; (i) the loan-to-value ratio is between 80 and 95 per cent; (j) subject to subsection (3), the terms of the loan agreement require scheduled repayments of the principal of the loan for the full period of the agreement; (k) subject to subsection (3), the loan agreement has a term of no more than 30 years; (l) for a Regional First Home Buyer Guarantee: (i) the residential property is located in a regional area; and (ii) at least one borrower under the loan agreement either, has lived throughout the previous 12 month period in the regional area or an adjacent regional area, or is covered by subsection (2AA); (m) where the loan relates to the purchase of an interest in land on which a dwelling is not affixed, and the construction of a dwelling on the land—the loan agreement for the construction of the dwelling meets: (i) the new dwelling contract requirements in section 29CA; and (ii) the timeframe requirements in section 29CB. (2AA) The borrower is covered by this subsection if: (a) the borrower has lived during some of the previous 12 month period in the regional area or an adjacent regional area; and (b) it has been impracticable for the borrower to live in the regional area or an adjacent regional area for the remainder of that period because the borrower has, after having been employed by the same employer for at least 12 months, been required, by that employer, to relocate. (2A) For a New Home Guarantee, the requirements in paragraphs (2)(a) to (g) must instead be satisfied at the time the borrower or borrowers make an application for a loan, or when the contract to which the loan agreement relates is entered into (as relevant).

Note: The requirements in paragraphs (2)(h) to (k) must be satisfied at the time the loan agreement is entered into.

(2B) For a Family Home Guarantee, paragraphs (2)(b), (d) and (i) do not apply and the following requirements must be satisfied instead: (a) there is a single borrower under the loan agreement who will be the only registered owner of the property; (b) the borrower is an eligible single parent or an eligible single legal guardian; (c) the loan-to-value ratio is between 80 and 98 per cent. (3) Where the loan relates to the purchase of an interest in land on which a dwelling is not affixed, and the construction of a dwelling on the land: (a) for the purposes of paragraph 29C(2)(j), the loan agreement may provide for interest-only payments to be made while the dwelling is being constructed; and (b) for the purposes of paragraph 29C(2)(k), the period of the loan agreement may exceed 30 years, but only if the period of the loan agreement after completion of construction of the dwelling is not more than 30 years. (4) This subsection applies to a loan if: (a) the loan (the refinancing loan) is for the sole purpose of fully satisfying the obligations of a borrower or borrowers under an existing loan; and (b) Housing Australia has previously issued a guarantee under this Part relating to the existing loan; and (c) no claim has been made in respect of the guarantee; and (d) the guarantee remains in force until the refinancing loan is entered into.