Homebuy Direct

With Homebuy Direct, you can buy a newly built home on a designated Homebuy Direct development with assistance from the Government's Homes and Communities Agency (HCA) and the house-builder, in the form of two equity loans.

You 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 the equity loans from the HCA and the house-builder (maximum 30% of the total purchase price).

For the first five years of the HomeBuy Direct home ownership you will pay nothing on the amount that the HCA and house-builder contribution to your purchase.

After five years, you will pay a fee to the HCA (through the National HomeBuy Agent) of 1.75% per annum on the outstanding amount of the equity loans from the Agency and the house-builder. This fee will increase each year by the RPI plus 1%.

When you sell your HomeBuy Direct home, you will repay the two Homebuy Direct loans from a share of the sales proceeds. So, if the HCA and the house-builder initially assisted the 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') towards the HomeBuy Direct loans at the current market value. The mimimum additional repayment is 10% of the total market value.

The HCA'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.

You will have a mortgage for less than the full purchase price of the property, but you will be the legal owner with 100% title to your home.

Find further details on HomeBuy Direct.