How do we qualify?
To qualify for the Rent to Own (HomeSaver) Programme you need to be:
- A first time home buyer
- Have minimal debt
- Have the ability to save towards a deposit
- Have a regular total household gross income (before tax) of between $65,000 - $95,000 per year
- In 5 years' time, be capable of obtaining a mortgage to purchase at least 55% of the value of your home.
What if I am on a low pay?
Your total household gross income (before tax) must be between $65,000 - $95,000 per year to apply.
What if I have had credit problems in the past?
This may not be a problem. We will review your circumstances and you will get expert financial advice to help clear your debts.
Is there anything else I need to do?
A home ownership education programme may be a requirement. If this is the case, it will need to be completed before or shortly after taking occupancy of the property.
What independent advice should I take?
You may wish to talk to a solicitor, financial advisor or a family friend. Feel free to ask them to talk to us.
5 YEAR OCCUPATION
How does the 5 Year Occupation Agreement work?
The Occupation Agreement provides the same rights as a Residential Tenancy Agreement with the option of purchasing the home after 5 years.
A bond is required to be paid at the commencement date of the Occupation Agreement. This will be equal to 3 weeks' rent and will be lodged with Tenancy Services. The bond is refunded at the end of the agreement or when you buy the property, provided that all weekly payments have been made and the property has been well looked after.
The Occupation Agreement gives you an absolute right to occupy the home for up to 5 years provided that rent payments are up-to-date and the property has been well maintained.
Can I sub-let the house to someone else?
No - In line with the Residential Tenancy Agreement and Residential Tenancy Act, you cannot sub-let the property to anyone else or make structural changes without the prior approval of the property owner, which in this case, is The Housing Foundation.
However, once you own the home outright from The Housing Foundation you can do as you wish.
How is the cost of the weekly payments assessed?
Your weekly payments will be determined by your ability to afford the rent based on your total household gross income (before tax), which will never be any greater than market rent.
Who maintains our home while we rent?
Housing Foundation will pay land rates, insurance and structural maintenance. You will pay electricity, telephone and internet, water, contents insurance and will be responsible for the day-to-day upkeep of the property i.e. mowing the lawns etc. We expect and want you to look after the property as if it were your own.
How big are the houses and are they new?
The properties will generally be new or near new, two, three, four or occasionally, five bedroom homes.
Can I make changes to the house being built?
No - The design and plans for the houses are determined by the builder. You are not able to amend the design or plans.
THE PURCHASE PROCESS
When can I buy the house?
You choose when to buy - you have the right to purchase part or all of the property at the end of the 5 year period or anytime within it, but only if your circumstances change and you are able to do so. You can put down your roots, raise your children, plant a garden and become part of the local community. Then when you are in a position to raise the money, you can purchase the property.
What if I still don't have the money for a deposit when I am ready to buy?
You will be required to join, or be part of the Kiwisaver programme, as well as save towards your deposit.
We will also help with the deposit by giving you 25% equity in the increased value of the property.
What is Equity?
The Equity is the difference between the original cost of the property and the current market value of the property. For example, if a property is priced at $650,000 when you move into your home and the value of that property increases over 5 years to $850,000, then the equity is the difference, which in this case, is $200,000.
If the figures from the above example are used in our Affordable Rental Programme, you will receive 25% of the increased equity. The equity that we gift you is $50,000 and this will go toward your deposit.
Will I receive my equity for my deposit in cash?
No - Your equity is deducted from the purchase price of the house as if it were a deposit.
Who values the property?
An independent registered valuer will assess the current market value of the property and a copy of the valuation will be provided to you. On commencement of the occupancy the original price of the property will always be less than the valuation, thus some equity is available to you from the day you take occupancy, allowing for growth in the future.
What if the value of our home goes down after 5 years?
You will have the option of continuing to rent until market values rise again. You will not lose any money because you have paid only the equivalent or less than market rent in the meantime.
Can the Housing Foundation provide mortgage finance?
Will the Housing Foundation help us to find a mortgage?
Yes - We will assist you with introductions to banks that we work with, but to eventually buy the property outright you will need to arrange your own mortgage from a bank or other financial institution.
What if we can't afford the mortgage payments after 5 years?
This should not happen as the amount of mortgage you can borrow is determined by how much you can afford to pay as mortgage payments.
Who maintains our home when we become an owner/shared home owner?
All maintenance from this point on will be your responsibility.
What if I sell our home after we have purchased it?
That is entirely your choice; there is the requirement to first offer the property back to the Housing Foundation to purchase it at the market price. This gives Housing Foundation the chance to purchase the property from you and then offer it to another working household who may be trapped in the rental market. Please note that you will not be eligible for our affordable housing programmes in the future.
IMPORTANT TO NOTE:
If you move out before the 5 years is up, you will terminate your Occupancy Agreement and you will have terminated your rights to purchase the home. You will have paid rent for the home while you have been the occupant. If you terminate your tenancy, you do not get a share of the growth in market value of the property.
How do I apply for the Rent to Own Programme?
Check out our Step by Step Guide for our basic criteria. Then follow the link to our Registration Form.
Also, click to check out our Shared Ownership programme.