Buying your first home in Scotland could soon get a little easier with the First Home Fund

What is the First Home Fund?

The First Homes Fund is a Scottish Government financial scheme designed to help first-time buyers get onto the property ladder. Applications are now open, with eligible first-time buyers able to receive up to £10,000 towards the cost of purchasing a home priced up to £300,000. 

Who is eligible?

he scheme is available to first-time buyers in Scotland who are purchasing either a new build or an existing property with a mortgage. To be eligible, you must: 

• Have never owned a home anywhere in the world, either on your own or jointly with someone else 

• Be buying the property as your main and only home in Scotland 

• Be taking out a capital repayment mortgage covering at least 25% of the buying price, or the valuation - whichever is lower 

It is also worth noting that you will likely need a deposit of around 5% of the purchase price, in addition to the Fund contribution. 

If you are buying with someone else, at least one of you must be a first-time buyer. If one of you currently owns a property, it must be sold before your purchase completes. Joint applications receive one First Homes Fund award of £10,000. 

Who cannot apply?

The First Homes Fund is not available to everyone. You will not be eligible if you are: 

• Buying with cash (a mortgage is required) 

• Purchasing a property to rent out 

• Using part exchange as part of your purchase 

• Currently holding an open application to another Scottish Government shared equity scheme 

How does it work?

The Scottish Government takes a part equity share in the home you buy, though you will own the property outright and your name will be on the deeds. There are no monthly repayments to the Scottish Government during your ownership, and no interest is charged on the contribution. 

The percentage share of the loan is repaid to the Government when you sell your home. 

How does repayment work when selling a First Homes Fund property?

When you sell your property, the Scottish Government's share is repaid directly from the proceeds of the sale. The repayment is calculated as a percentage - so if the Government contributed 15% towards your purchase, you would repay 15% of your property's value at the time of sale. 

It is worth keeping in mind that the repayment reflects your property's current market value, not what you originally paid. This means the Government's share could be worth more or less than the initial contribution, depending on how your property's value has changed over time. 

Before any repayment is made, you will need to arrange an independent valuation to establish your home's current market value, ensuring the repayment figure is fair and accurate for all parties involved. 

How do I apply?

As applications are now open, you can apply online after you have had your offer accepted on a property, or after you have reserved a new build - but this must be done before your property lawyer concludes missives. 

Our in-branch mortgage consultants are on hand to help you every step of the way. They can submit your application on your behalf, arrange a mortgage agreement in principle, and answer any questions you may have - acting as your point of contact between you and your property lawyer throughout the process. 

One thing to keep in mind is that there is a £650 application fee, which is refundable if the sale does not conclude - unless false information was provided as part of the application. 

Once you receive your award letter, you will have three months to conclude missives, and a further six months from that point to complete your purchase.