Split Loan Process
The Australian Government has announced as part of the 2012 Federal Budget, that the Home Ownership Program (HOP), and the Home Ownership on Indigenous Land (HOIL) Program, will be integrated into a single Indigenous Home Ownership program (IHO) on 1 July 2012. This will make the best use of available funding to help meet home ownership demand across Australia, and over 4 years, will assist up to an additional 545 Indigenous Australians to buy their own home.
IBA welcomes the Government’s announcement. The decision to integrate the two programs will enhance IBA’s capacity to cut housing loan waiting periods and meet the home ownership goals of an increased number of Indigenous Australians wishing to purchase or build a home of their own either in an established or emerging home ownership market on Indigenous land.
IBA will continue to prioritise access for people seeking to move into home ownership on Indigenous land as they become ready and the necessary land tenure and land administration arrangements are progressed by the relevant State and Northern Territory governments.
Further details of the Budget announcement can be obtained on the Australian Government Budget 2012-13 website (external website, new window) or by contacting the nearest IBA Homes Service Delivery Unit.
This table outlines the basic activities and responsibilities of the Applicant, IBA and Other Lender under the Split Loan process.
If you have any questions please phone us and follow the prompts to speak to a staff member.
| Stage of Process |
Who is responsible? |
Action required |
| Invitation |
IBA |
- Clients are invited to apply for a loan and are provided with:
1. Letter of invitation
2. Loan application form
|
|
Applicant |
- Applicants complete loan application form and provide all necessary supporting documentation, including income details, privacy consent etc
|
| Application |
IBA |
- Upon receipt, IBA Lending Officer assesses application to determine what assistance can be provided
- The IBA Lending Officer will determine if the Applicant’s financial situation is such that they are eligible for full or partial funding from IBA
|
| Proceed to purchase |
IBA |
- If eligible for assistance, Applicants are provided with formal notification of the conditions upon which any IBA loan offer may be made, including the requirement that some funds will be required to be sought from a lender other than IBA
|
|
Applicant |
- Lodge application with a lender other than IBA to secure the balance of funds required to purchase their home
- Make preliminary enquiries to engage legal representation
|
|
Other lender |
- Assess application and determine if assistance can be provided on the basis of a 1st mortgage, with IBA as 2nd mortgagee
|
| Pending approval |
Applicant |
- Applicants select home of their choice and provide copies of contracts to both lenders (via agent or legal representative)
|
|
IBA |
- Finalise assessment of application and provide formal loan approval
- As part of the loan approval process, IBA will:
1. Process First Home Owner Grant application
2. Obtain a Valuation report satisfactory to IBA**
3. Obtain Pest and Building reports satisfactory to IBA**
- Issue loan approval documentation to Applicant
|
|
Other lender |
- Finalise assessment of application and provide formal loan approval
- Obtain any reports necessary under lending requirements**
- Issue loan approval documentation to Applicant
** Where practical, IBA is willing to share reports with other lender to reduce costs to Applicant |
| Settlement |
IBA |
- Prepare IBA mortgage documents and initiate Priority Agreement
|
|
Other lender |
- Liaise with IBA (or its legal representative) to facilitate the completion of a Priority Agreement
- Complete internal processes for production and execution of mortgage documents
|
|
Applicant |
- Sign necessary documentation and return to IBA and the other lender (or their legal representatives)
|