.:. Housing Options - Your gateway to affordable housing .

This will depend on your household’s income, savings, any property
you already own, any financial commitments such as student loans, the mortgage you can get, and the purchase price of the property you are buying. The maximum loan is usually 25% of the lower purchase price or valuation, except in the case of Advantage where applicants can obtain flexible equity loan shares.

This innovative partnership will enable the Government to double the number of people who can be helped by the Open Market HomeBuy.

There is no change to the overall eligibility criteria for this product. But changes to the product's structure may make the product unsuitable for some applicants.

Depending on the product chosen, after 5 years the mortgage lender may start levying a charge on their equity loan – this could be up to 3%. After 10 years this could increase to the lenders standard variable rate. The first 5 years being interest free helps make this an affordable option for buyers.

If you die, your home will be passed on in the normal way under the terms of your will. If you have not made a will it will pass under the laws of intestacy.

Purchasers will need to re-pay the Lender’s 12.5% equity loan by the time they finish repaying the mortgage, or alternative share amount they obtain via Advantage.

Purchaser’s have the option of staircasing to full ownership. The Lender’s loan must be re-paid first either by a single lump sum repayment, or depending on the Lenders terms and conditions, they may have the option of repaying in smaller chunks. After repaying the Lenders loan, then the purchaser can repay the government loan – this must be done in one lump sum.

When the purchaser wants to sell the property the Lender will arrange a valuation – this is paid for by the home owner. When the property is sold it is the valuation and not the sale price which will be used to calculate how much the homeowner will need to repay. If the sale price is higher than the valuation then the homeowner gets to keep the difference. If it is less, then they owe the difference to the Lender and government.

The loans can be paid off at any time the purchaser is in a financial position to do so.

The original loans will need to be repaid, and they will have to
purchase under the current rules using one of the designated Lenders. Early repayment charges can be refunded if purchasers move within the first 5 years and stay with the same Lender.

Homes bought on a leasehold basis must have at least 55 years remaining on the lease (decreased from 80 years).

Properties under construction and being marketed by developers can be bought if sale price is fixed and exchange of contracts takes place within 6 months of receiving Invitation to Search.

Applicants can purchase a property with 1 bedroom more than they need

If the property needs more than £3500 worth of work because of defects then we would not allow it.

Applicants can purchase a property they are currently renting, as long as the value of the property is verified by the survey.

The property must be residential with no commercial use

After completion the homeowner must notify the HBA if they intend to make any alterations to the property. Permission must be obtained from the HBA in writing.

Properties cannot be purchased at auction

Any type pf mobile home – houseboats, caravans etc cannot be purchased under OMHB

If Open Market HomeBuy is obtained on the basis of being a key worker and the homeowner later changes job to a non-key worker profession then the HomeBuy Agent must be repaid in full within 2 years. If homeowner starts working within the qualifying role again within 2 years, then clawback does not apply.

As a guideline, HomeBuy Agents are expected, but not limited, to use 3 x joint and 3.5 x single income multiples to determine the potential purchaser's mortgage potential. In exceptional circumstances there is flexibility around these multiples. Our aim is to ensure those who are eligible and need financial assistance to buy can and that home ownership is sustainable in the longer term.

The level of borrowings will be the lower of either the amount calculated by the HomeBuy Agent or the lender.

Pricing will depend on competitive forces, as the lenders compete for custom. Although the product is likely to be slightly more expensive than the current product it will still be affordable to our client groups and comparable, or cheaper than, our other low cost home ownership schemes and unassisted mortgage deals available. This programme is designed to help those who need financial assistance. If you can afford to buy on your own on the open market this product is not for you.

Lenders are likely to charge a small premium on the interest rate of the standard mortgage, but we aim to ensure that the products are comparable with current shared equity schemes and affordable for our client groups.

HomeBuy Agents remain central to the delivery of the product. They will continue to process applications, assess eligibility and provide the Government's equity loan. From the applicant's perspective there will be little difference in accessing the product under the deal. They will simply receive both a mortgage and part of their equity loan from the lender instead of just the mortgage.

No. The new product is one package. Applicants cannot receive the Government equity loan in isolation.

Purchasers can retain up to £10,000 in savings, including the £3,500 that they are likely to need for transaction costs.

Yes. We hope to attract other lenders to the scheme to expand the choice available to applicants.

Applicants can approach lenders or IFA for their mortgage and equity loan from 2 October 2006.

One of the lenders (Advantage) will accept large deposits. Alternatively those with large deposits who do not want to take out a mortgage can opt for New Build HomeBuy or the First Time Buyers initiative, but they would then need to pay a rent on the unowned equity.

Further advances will not be a standard feature across all products at the launch in October. Nationwide will provide further advances to enable repayment of their equity loan, and Advantage will also provide further advances.

Applicants who have already received the go ahead to buy a property under the old scheme can continue to make their purchase. However they should be aiming to complete before 30 September. In exceptional circumstances the HBA may agree to the completion taking place after 30 September.