First Homes Fund opens

The scheme offers eligible first-time buyers up to £10,000 towards buying their first home. The Scottish Government has said the first phase could support up to 2,000 households in the first 100 days, with around 50,000 households expected to benefit over the course of this Parliament.

How does the fund work?

The First Homes Fund is a shared-equity scheme. This means the Scottish Government provides a contribution towards the purchase of your home and, in return, holds a percentage equity share in the property.

For example, if you buy a home for £100,000 and receive £10,000 from the fund, the Scottish Government would normally hold a 10% share in the property.

You would still own the home and have full title to it. There are no monthly payments to make to the Scottish Government and no interest is charged on the contribution. The Scottish Government’s share would usually be repaid when the home is sold, or when another payment event takes place under the shared-equity agreement.

Who can apply?

The fund is open to first-time buyers in Scotland. A first-time buyer is someone who does not own, and has not previously owned, a property in Scotland or anywhere else in the world.

The fund can be used to buy a property with a Home Report value of up to £300,000. There are no restrictions on the age or location of the property.

You must have a mortgage covering at least 25% of the purchase price, and the mortgage must be a capital repayment mortgage, not interest-only.

Things to consider

The First Homes Fund is not a grant. The Scottish Government will own a share of your home, and the amount repayable will depend on the value of the property at the point the share is repaid.

As the homeowner, you would also be responsible for the usual costs of ownership, including mortgage payments, buildings and contents insurance, repairs and maintenance, Council Tax, heating and other household bills.

The fund cannot be used for buy-to-let properties, and the home must be the sole residence of all applicants. It also cannot be used together with other Scottish Government schemes to help buy a home, although a Help to Buy ISA or Lifetime ISA can be used towards your deposit.

When should you apply?

You must have had an offer accepted on a property before applying. However, you cannot apply after missives have been concluded and a moving-in date has been agreed.

The Scottish Government recommends speaking to an Independent Financial Adviser before applying, to make sure the scheme is right for you.

Find out more

You can find full details, including how to apply, on the mygov.scot website