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Homebuy Direct

With HomeBuy Direct, you can buy a newly built home on a designated HomeBuy Direct development with assistance of two equity loans. One loan is from the Homes and Communities Agency and one from the house-builder.

You would take out an affordable mortgage (minimum 70% of the total purchase price) on which you make repayments in the normal way. The rest of the purchase price will be paid for with equity loans (maximum 30% of the total purchase price).

For the first five years of ownership you will pay nothing on the amount that the Agency and house-builder contributed to your purchase.

After five years, you will pay a fee on the two equity loans of 1.75% per annum. This fee will increase each year by the RPI plus 1%.

When you sell your HomeBuy Direct home, you will repay the loans from a share of the sale proceeds. So, if you were initially assisted to purchase with a 30% contribution, the repayment will be 30% of the total value when it is sold.

After 12 months of ownership you can also choose to make part repayments (‘staircasing’) of the HomeBuy Direct loans at the current market value. The minimum additional repayment is 10% of the total market value.

The Agency’s and house-builder’s entitlement to a share of the future sale proceeds is secured through second charges on your home. This is done in the same way that your mortgage lender will secure its lending through a first charge on your home.

Although, if you buy through HomeBuy Direct, you will have a mortgage for less than the full purchase price of the property, you will be the legal owner with 100% ownership.

 

Click here for all the forms that you will require to apply for government funding.