The Government has allocated the first tranche of funding in its Progressive Home Ownership scheme almost three years after promising the policy was agreed to by Labour and the Greens.
Some $400 million has been earmarked for the scheme, which the Government expects to eventually help between 1500-4000 families buy their own homes.
The first $23m of this scheme has been allocated today.
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The policy was announced as part of the KiwiBuild reset this time last year, which was announced after the policy failed to deliver on expectations.
The plan includes a shared ownership system – whereby a family owns most of a house, but a housing provider – backed by Government funding – owns the rest.
For example, a family with an annual income of $85,000 would be able to take out a mortgage for 65 per cent of a home that costs $650,000.
The housing provider would take on the rest of the mortgage, minus the cost of the deposit – which would be paid by the family.
That family can buy the provider's share of the property over time and, if the family decides to leave the home, any increase in house value is shared between the household and the provider.
This means the Government expects to recoup the $400 million it plans to spend on the scheme.
Housing Minister Megan Woods announced the Housing Foundation in Auckland and Queenstown Lakes Community Housing Trust are the first providers to get the Government cash.
Auckland's Housing Foundation will get $17 million for 78 homes, while Queenstown's trust will receive $6.3 million for 25 one and two-bedroom apartments.
She expects funding for these providers would help 100 low to medium income families into homes – the first group by November.
Woods said she expects to make further announcements as to which other providers will receive Government funding for the scheme in the coming weeks.
Those announcements could include details of a rent-to-buy scheme, whereby the nominated Government backed housing provider would buy the property outright, and a family rents it and some of the rent money is put aside for a deposit to buy that home.
The Progressive Home Ownership scheme was agreed in the Labour/Greens confidence and supply agreement after the 2017 election.
The two parties promised to deliver: "A Rent to Own scheme or similar progressive ownership models will be developed as part of Labour's KiwiBuild programme".