How do I qualify for the Rent to Own (HomeSaver) Programme?
If you have manageable debt and/or a low deposit our Rent to Own /HomeSaver programme may be an option for you. If all the other essential and specific requirements are met for the Location you are interested in, please apply. Once you submit an Application Form online, Housing Foundation will advise you if this option is more suitable for you if you are not quite able to meet the requirements for our Shared Ownership Programme.
- A first-time home buyer
- Have manageable debt that can be paid off within 5 years
- After renting your home for five years, you are able to obtain a mortgage to buy a minimum of 60% of the purchase price of your home. (The home will be revalued after 5 years and you will get 25% of the uplift in value to put towards a deposit).
What if I am on a low pay?
Your total household gross (before tax) income must be approximately between $65,000 and $95,000 per year. This may vary depending on the location of the development you apply for.
What if I have had bad credit 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 moving into your house.
What independent advice should I take?
You may wish to talk to a solicitor, financial adviser or a family friend. Feel free to ask them to talk to us.
How does the 5-Year Occupation Agreement work?
Our Occupation Agreement provides the same rights as a Residential Tenancy Agreement but with the option of purchasing the home after you’ve been renting it for 5 years.
A bond is required to be paid before moving in. This will be equal to 3 weeks’ rent and will be lodged with Tenancy Services. The bond is refunded at the end of the 5-year fixed term, when you buy the property outright or move to shared ownership, provided that all weekly payments are up to date 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.
Your weekly rent payments will be determined by what you can afford based on your total household gross income (before tax), which will never be more than market rent.
When can I buy the house?
You have the right to purchase part or all the property at the end of the 5-year fixed term rental period.
What if I still don’t have the money for a deposit when I am ready to buy?
You will be part of the KiwiSaver programme, as well as the money you have saved over the 5-year period while renting. At the end of the 5-year rental period when the property is revalued, you will be entitled to 25% of the increase in value to use as a deposit. This will become part of your equity in the property and will be deducted from the purchase price of the property. For example:-
Value of property at beginning of 5-year period = $650,000
Value of property at end of 5-year period = $850,000
Difference in value = $200,000.
25% of the difference = $50,000 (for you!)
How is the property valued?
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 your occupancy the original starting 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. When the time comes for you to progress to the Shared Ownership programme, we will assist you by introducing you to the banks that we work with and who approve our shared ownership programmes. You will need to then arrange your own mortgage with the bank.
What if we can’t afford 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 (based on your income) in mortgage payments.
How do I apply for the Rent to Own (HomeSaver) Programme?
You apply online using the Application Form. Housing Foundation will assess which programme is most suitable for you based on your financial circumstances, either our Rent to Own (HomeSaver) Programme or Shared Ownership Programme. Find out about the Shared Ownership Programme.