29IANew Home Guarantees

29IA New Home Guarantees

Additional guarantees for the 2020-21 financial year (1) In addition to the guarantees that Housing Australia may issue under section 29I, 29IB or 29IBA, Housing Australia may issue up to an additional 10,000 guarantees (New Home Guarantees) in the 2020-21 financial year, in relation to loans that meet the requirements of subsection (3) (as the case requires). (2) The total number of New Home Guarantees issued to major banks in the 2020-21 financial year must not exceed 5,000. Additional guarantees for the 2021-22 financial year (2A) In addition to the guarantees that Housing Australia may issue under: (a) section 29I or 29IB; or (b) subsections (1) or (4) (the earlier guarantees); Housing Australia may issue up to an additional 10,000 guarantees (also New Home Guarantees) in the 2021-22 financial year, in relation to loans that meet the requirements of subsection (3) (as the case requires). (2B) The total number of New Home Guarantees issued to major banks in the 2021-22 financial year must not exceed: (a) 5,000; and (b) if a determination has been made under subsection (4)—50 per cent of the guarantees covered by that determination. Requirements for New Home Guarantees (3) For subsection (1), the following requirements (as relevant) must be satisfied at the time the loan agreement is entered into: (a) the loan relates to the building or purchase of a newly built dwelling; and (b) where the loan relates to the purchase of an interest in land and the construction of a newly built dwelling on the land: (i) if it is more than 90 days after the eligible lender gave notice of approval by Housing Australia for the issue of a guarantee—the borrower or borrowers have entered into a construction contract; and (ii) if it is more than 12 months after the date the construction contract was entered into—the construction of the dwelling has commenced; and (iii) if it is more than 24 months after construction commenced—construction of the dwelling has been completed. (c) where the loan relates to the purchase of a newly built dwelling that is off-the-plan: (i) if it is more than 90 days after the eligible lender gave notice of approval by Housing Australia for the issue of a guarantee—the borrower or borrowers have entered into a contract of sale; and (ii) if construction of the dwelling had not commenced on or before the date that the contract of sale was entered into (the contract date), and it is more than 12 months after the contract date—construction of the dwelling has commenced; and (iii) if subparagraph (ii) applies, and it is more than 24 months after construction commenced—construction of the dwelling has been completed; and (iv) if construction of the dwelling commenced on or before the contract date, and it is more than 24 months after the contract date—construction of the dwelling has been completed.

Note 1: The requirements in subsection (3) relate to the issue of a New Home Guarantee by Housing Australia. These requirements (as relevant) must be satisfied at the time the loan agreement is entered into and the New Home Guarantee is issued. Each requirement must only be satisfied to the extent that it applies in a particular case. The requirements do not affect the validity of a New Home Guarantee once issued (for example, if a requirement that had not arisen before entering into a loan agreement fails to be satisfied after the guarantee is issued).