IBA Housing Loans
Indigenous Business Australia (IBA) aims to make home ownership a realistic choice for Indigenous Australians wishing to achieve home ownership within the property market and on communal land.
Through its Indigenous Home Ownership program, IBA provides a package of concessional housing finance and after-care support to assist eligible customers to:
- purchase an established residential property
- purchase land and/or construct a new home
- make essential improvements to an existing home.
The level of financial assistance IBA can provide will depend on the individual circumstances and location of eligible customers.
Most housing loans are offered to first home buyers who have the capacity to repay a long term loan but are unable to secure finance from a bank or other home lending institution.
The amount of loan funds an IBA customer is able to borrow is based on their income and capacity to repay the loan, and location purchase price limits. IBA requires applicants on higher incomes to source a portion of their required loan funding from a recognised commercial home loan lender. In these situations, IBA’s Split Loan can be applied to meet the gap between the amount that the customer is able to borrow from the commercial lender and the purchase price.
Housing loan features
IBA’s housing loans feature:
- low deposit requirements
- low interest rates that are linked to borrowers’ income and that gradually increase until they reach market variable interest rates for owner-occupied homes
- standard loan terms of up to 32 years that may be extended to assist loan affordability.
In addition to its standard housing loan features, IBA can provide additional financial assistance for individuals wishing to buy or build a home on communal land. To be eligible for this assistance, a community must first have been assessed and accepted by IBA as a location in which the program is to be available.
Types of housing loans
Purchase or construction of homes
A loan to purchase either an established residential property, purchase (freehold) land and construct a new home, or construct a new home on communal land.
A condition of construction loans is that the house is to be built:
- by a registered licensed builder and
- under a fixed-price contract.
Loan funds are released on a progressive drawdown basis with a progress/valuation certification at each stage of construction. IBA will fund a project manager to assist with advice on all facets of the building process including selection of the builder, value for money, adequacy of design and confirmation that building works are of an acceptable standard.
Purchase and upgrade/renovation of an established residential property
The house renovation must be undertaken by:
- a registered licensed builder and
- under a fixed-price contract.
Loan funds are released on a progressive drawdown basis with progress/valuation certification at each stage of construction.
Purchase of residential land
A loan to assist with the purchase of land on which you will build a house. Construction of a house on that land must be completed within an approved time period.
Applicants on higher incomes who are eligible to borrow a portion of their loan funds from a commercial lender, may be offered a Split Loan by IBA for the balance of the funds required.
An IBA Split Loan meets the gap between the amount that the customer is able to borrow from the commercial lender and the purchase price. Providing Split Loans means that:
- more Indigenous Australians are able to take advantage of IBA’s program to buy their own home
- the waiting time for an IBA housing loan is reduced.
Split Loans also provide customers with the opportunity of establishing a relationship with a commercial lender, who may in turn offer a broader range of financial products tailored to meet individual’s needs or goals (for example, daily transaction and investment accounts, debit cards and home insurance products).
Special assistance loan products
In special circumstances IBA may consider providing a loan to a non first home buyer. Your local IBA lending officer can provide guidance on whether your particular circumstances can be considered.
For further information about the terms and conditions attached to IBA’s housing loans please Contact Us.
First Home Owner Grant
The Australian Government’s First Home Owner Grant (external website, new window) (FHOG) provides funding through state and territory governments to first home owners. The amount of the FHOG is subject to eligibility criteria and conditions applicable at the time the grant is approved.
For further information
Home ownership is perhaps the most important and expensive purchase you will ever make. In order to make an informed choice that suits both your current personal and financial circumstances, and your plans for the future, IBA suggests you read more about:
- Getting Ready for Home Ownership
- Additional Costs of Buying a Home
- Managing Your Housing Loan
- Loan Fees and Charges
- Home ownership information sessions.
Our friendly and experienced staff are here to help, so if you need any further advice, assistance or information please Contact Us.