Australian Defence Force Home Loans

If you’re in the Australian Defence Force, there are several home loans open to you that are designed towards helping you get your dream home. There are also grants for ex-military personnel who want to get settled in a home of their own. 

Let’s take a look at some of these grants below:

1. The Home Purchase Assistance Scheme (HPAS)

What? You can get a lump sum payment of $16,949 (minus tax)?! Yes, it’s called HPAS. It is given to assist the members of the Australian Defence Force (ADF) purchase their own homes.

If you are an ADF member, you can only receive an HPAS payment once throughout the period of your service. The criteria for eligibility under this grant are as follows:

• You must buy a home in your new location after getting your posting order. 
• You must be in that location for at least 12 months after signing the contract
• You have to occupy the home within the required time limit.

However, if you live away from your family for Service reasons, you can choose to buy a home where they live. But they must live in the home you bought for at least 12 months. One thing you want to remember, however, is that if you buy the house jointly with someone who’s not a dependent, you will only get a percentage of the grant.

Once it is certain that you are eligible to receive HPAS, the lump sum payment will be made to you. After that, you will then have to pay your house deposit. Once you have signed either the contract to purchase the home or the agreement for it to be built, then you are considered to have purchased a home.

If the sale is unsuccessful, you may need to repay the HPAS sum you received. But if you were unable to buy the house because of service reasons, then you may be able to claim reasonable costs.

Now, you must note that if a non-ADF member (who isn’t listed as a recognised partner) is the joint owner of the property, it will affect the amount you get under HPAS. So if, for instance, you (an ADF Member) purchased the house jointly with a friend, and:

• The friend is not an ADF member
• The friend was not officially listed as your partner;

then you will only be eligible to receive 50% of that $16,949 lump sum payment.  

2. The Home Purchase or Sale Expenses Allowance (HPSEA) 

This one is an interesting one! The HPSEA is an allowance for ADF members who have been posted to a new location. It aims to cover all reasonable costs that an ADF member has to make when they sell a home at the time they’re being posted to a new location. It also covers the expenses that you have when you sell your house from your previous posting location and buy another house in the new location. 

HPSEA makes provision for reasonable expenses like:

• Real estate agent’s commissions;
• Stamp duty;
• Solicitor’s fees, etc. 

The purpose of HPSEA is basically to compensate ADF members for the expenses they have to incur due to selling and buying houses because of their postings. Therefore the amount that gets paid as this allowance depends on the costs incurred.

3. The Defence Home Ownership Assistance Scheme (DHOAS)

The Defence Home Ownership Assistance Scheme (DHOAS) is designed to help current, and former ADF members and their families become homeowners. Run by the Department of Veterans’ Affairs on behalf of the Department of Defence, DHOAS aims to improve ADF recruitment and retention. 

To do this, the Department of Veterans’ Affairs ensures that those who have access to the loans from this scheme are soldiers who have served for a long time in the Australian Defence Force. This means that the longer you serve in the ADF, the more entitled you get to recieve help under DHOAS, and the more assistance you can get under DHOAS. 

To be eligible for a loan under this scheme, you must have served within the last five years of applying for DHOAS. In addition, you must have completed a qualifying period of service and obtained a service credit.

Once you apply for DHOAS and get approval, you will receive an email containing a certificate of entitlement. This certificate is your magic wand under DHOAS. With it, you can prove your DHOAS eligibility when you go to the bank for your home loan. 

DHOAS gives you a subsidy on the interest of your home loan. The subsidy, which gets paid into your home loan account monthly, has three tiers. The amount of subsidy you receive depends on the tier that you are in. And the tier that you’re in depends on how long you have served. The longer you have served, the higher your tier level and the higher monthly subsidy payment you will receive.

To get the finer details about how DHOAS subsidies work, visit the Australian Department of Veteran Affairs site.