More than 40 Tauranga first-home buyers have applied for the Government's new housing subsidies and a quarter have been approved.
Figures from Housing New Zealand show it received 42 applications for HomeStart grants in April from Tauranga and 12 were approved, totalling $59,000 in subsidies. One was declined because it did not meet criteria and 29 were being processed.
Western Bay of Plenty data reveal six applications have been lodged with three approved and $21,000 released. One was declined and two are still being processed.
HomeStart gives first-home buyers grants of up to $20,000 and lets eligible KiwiSaver members use more of their funds on their first property.
Housing and Building Minister Nick Smith said there had been more people applying to the HomeStart scheme and estimated as many as 3500 people in Tauranga could be eligible for the grants over the next five years.
Rothbury Tauranga general manager Jon O'Connor said it had helped six clients apply for a HomeStart grant since the changes came into force a month ago.
The company had mortgage advisers who had been helping clients with subsidies for several years but some people had waited until the changes came into effect on April 1 before taking action, Mr O'Connor said.
"We think it's fantastic and particularly attractive for regions that have a lot of construction or building going on. It's very good for first-home buyers as their first home might be brand spanking new rather than run down and cold like most of us bought for our first home."
However, Rapson Loans and Finance owner Chris Rapson said the scheme would not help those who were struggling to save a deposit because of short-term debt such as credit cards, personal loans and hire purchase agreements that tend to be financed at three to five years with interest rates ranging from 16 to 30 per cent.
Mr Rapson said he recently spoke to a young couple with children who had more than $100,000 in short-term debt which would take more than three years to clear before they could even think about borrowing for a house. To clear the debt the couple would have to sell assets, he said.
"That makes my eyes water. They really have to get rid of short-term debt as it has a damaging impact on their ability to service standard borrowing."
Tauranga Budget Advisory Service manager Diane Bruin said one of the issues it identified when it launched a ground-breaking scheme to help renters save for a deposit was high interest debt.
Reaction to the project that included managing all or some of their clients income "has been huge" with people ready to commit to the programme.