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Family Home Guarantee for single parents

The Family Home Guarantee (FHG) is a federal scheme designed specifically for single parents and eligible single legal guardians. It allows qualifying applicants to purchase a home with just a 2% deposit, without paying Lenders Mortgage Insurance. 10,000 places per financial year.

Note: this is a distinct scheme from the First Home Guarantee (same acronym, different program). Context matters.

Who qualifies

  • Single legal guardian with at least one dependent child under 18 in their care
  • Australian citizen (permanent residents added from July 2023)
  • Income cap: $125,000 gross per year (applicant only)
  • 2% deposit minimum, in genuine savings held 3+ months
  • Property price cap: same as First Home Guarantee by state/location

The key relaxation: you don’t need to be a first home buyer

Unlike the First Home Guarantee, Family Home Guarantee is available to single parents who have previously owned property. The scheme is designed to help single parents re-establish home ownership after divorce, separation, or bereavement - common life events where the applicant may previously have owned a family home with a former partner.

This is the critical differentiator. Many single-parent clients first ask about the First Home Guarantee and don’t realise they qualify for the more generous Family Home Guarantee instead.

Dependent child definition

“Dependent child” means a biological, adoptive, step or foster child in the applicant’s primary care. The child must be under 18 and substantially reside with the applicant (more than 50% of the time).

Co-parented children where care is split 50/50 can be more complex - the scheme requires the applicant to have “responsibility for the day-to-day care” of the child, which practically means the applicant receives Family Tax Benefit Part A or equivalent.

How the 2% deposit works

You need 2% of the property price in genuine savings. On a $650k property, that’s $13,000. The government guarantees the remaining 18% LVR gap that would otherwise require LMI. The lender is effectively lending you 98% LVR against a guaranteed 80% LVR.

Practical costs:

  • Deposit: 2% ($13k on $650k)
  • Stamp duty: varies by state, often reduced for first-home buyers even if you’ve owned before
  • Legal and settlement costs: ~$3k
  • Total typical cash requirement: $20k-$30k including all costs

Participating lenders

Most big-four and second-tier lenders participate. You apply through the lender, who processes the guarantee with Housing Australia at settlement.

Where single parents get tripped

Income volatility: child support, Family Tax Benefit, and similar payments are accepted as income by most participating lenders but need to be evidenced for 6+ months of history.

Mortgage serviceability at the 3% buffer: the 98% LVR loan is large, and the APRA 3% buffer applies. At current rates, the stress test is demanding. Some applicants qualify for the guarantee but fail lender serviceability.

Previous shared-ownership debts: if you were on a joint mortgage with a former partner and were unable to refinance out, the old mortgage may still appear on your credit file as a liability. Clean this up before applying.

When not to use FHG

If the property is small relative to your income ($400k purchase on $125k income), you probably don’t need the guarantee and could save LMI by accumulating a 20% deposit over 18-24 months. For that profile, renting and saving may be cheaper. For everyone else - where the deposit is the binding constraint, not the income - FHG is the most generous scheme available in 2026.