Kāinga Ora First Home Loan
Kāinga Ora First Home Loan Guide
Types Of Homes I Can Purchase Under First Home Loan?
Existing Homes: There are a couple of points to note here
01. Cross-lease and Leasehold properties:
> Cross-lease properties are fine.
> Leasehold can be considered on a case by case basis. The bank normally isn’t a fan of these, a couple of points to bear in mind are: the lease needs to be perpetually renewable, the loan must be fully repaid prior to termination date of lease (excluding any rights of renewal) and lease payments need to be included in servicing. The bank will also look at whether there is the possibility for lease payments to be increased within the term. There are more factors for the bank to consider with these properties however these are the main highlights.
02. Apartments and Small Homes:
Any property must be 45m2 or more (excluding decks). Some of the First Home Loan lenders will only accept 50m2. If you’re looking ay arpatemners please let your adviser know so they can explore your potential options.
> Houses with monolithic claddings: These will not be accepted. However, these may be considered if they have been re-cladded or brought up to code.
> Section size: The section size for your new home cannot be more than 10,000 sqm or 1 ha.
> Deferred Maintenance: Where a property shows more than 5-10k (varies across providers) of deferred maintenance, Kāinga Ora will likely not approve the property unless you can evidence a repair strategy and payment for therepairs. Where repairs are estimated to be below the maximum value allowed the lender will require quotes to support this. Deferred maintenance can often show up in Building Reports, Registered Valuation Report or advertisement of the property for sale. Deferred maintenance is anything that requires attention or repair.
> Builds: The only style of new build acceptable under the First Home Loan Package is 100% complete “Turn-Key” Package.
A Turn-Key build is set up for you to pay a small deposit at the beginning of the build, there are no progress payments, your lending is drawn down when your build is completed and has passed its code of compliance. This saves you from having to make mortgage repayments whilst the build is happening so you will still be able to manage rent or board whilst the build is being completed
Fees to consider:
Low Equity Premium (LEP)First Home Loans charge a 1.2% (As at 1 July 2025) one off LEP, this fee can generally be capitalised to your loan, however some banks will require payment up front.I’m Now Approved…
What Extras Should I Know?
● Registered Valuation Report (RVR):
This will be required to be completed in order to confirm finance, if the RVR comes in lower than the purchase price then personal savings will be required to cover the difference, if you choose to proceed with the purchase. It’s important to note the RVR needs to meet the criteria of First Home Loans including showing at least 5 comparable sales in the last 6 months.
NOTE: for Turn Key purchase’s a fully completed RVR needs to be completed twice, one at the beginning and one at the end.
● Gifted Funds: If you are receiving a gift, the cash funds will be required to pass through your personal account. It’s important to note an additional credit check will be done prior to settlement, in order to ensure there are no new enquiries and new debt has been acquired.
● Utilising KiwiSaver for your deposit – If organised promptly KiwiSaver can be paid to your solicitor within 10 finance days so can be used towards your contract deposit.
● Account opening: Time to arrange an appointment as soon as possible with the bank in order to be formally identified and organise accounts. The Mortgage Girls can organise the bank to ring you in order to make a time that suits.
● Trusts and Look Through Companies: Under first Home Loans your lending can not be under a Family Trust or Look Through Company
● Making an Offer: Key Considerations
When submitting an offer, ensure you allow a minimum of 10 working days for the finance clause. This timeframe is essential, as several key steps need to be completed to secure approval.
● Contract Deposit Guidance: As you negotiate the terms of the contract, be mindful of the deposit payable upon confirmation. If the agreed deposit is less than 10% of the purchase price, ensure this aligns with the funds you’ll have available at that stage.
Eligibility Reminders.
01. Living situation: Must have lived 1 year in your current or previous residential address
02. Employment situation: Employment situation: Must have been in your current job 1 year or more if not in the industry / same job for 2 or more years prior. For new employment contracts need to show no 90-day clause, if you have been in your new role less than 90 days
03. Income caps: Visit kaingaora.govt.nz under eligibility criteria it sets this information out
04. Savings: You are able to hold back a maximum of $5,000 savings from your deposit for your home, for items such as legal and valuation costs – if you are wanting to hold additional savings out from your deposit the bank requires quotes for the items, some examples are a new fridge/ maintenance/repairs or a new heat pump. (Some lenders will allow $5,000 per applicant to be held back, others are $5,000 combined)
05. Renting out your property: You cannot rent your property whilst on First Home Loan, we can look to refinance you if you would like to rent down the track.
06. Previous home owner? You can have previously owned a home, however need to meet the criteria of second home buyer. Visit kaingaora.govt.nz to find out more about being a qualifying previous home buyer.
07. High Value Asset owner? Under the First Home Loan; you can own one vehicle per person. Any assets over $5,000 such as caravans/boats/toys will need to be sold and put towards the deposit. 08. Do you have a partner? For First Home Loans all parties must be included on the application. where you have a partner, the application would need to be a joint application.
08. Do you have a partner? For First Home Loans all parties must be included on the application. where you have a partner the application would need to be a joint application.
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Disclaimer: The Mortgage Girls Ltd believes the information in this publication is correct as at May 2024, and it has reasonable grounds for any opinion or recommendation found within this publication on the date of this publication. However, no liability is accepted for any loss or damage incurred by any person as a result of any error in any information, opinion or recommendation in this publication. Nothing in this publication is, or should be taken as, an offer, invitation or recommendation to buy, sell or retain any investment in or make any deposit with any person. The information contained in this publication is general in nature. It may not be relevant to individual circumstances. Before making any investment, insurance or other financial decisions, you should consult a professional financial adviser. This publication is for the use of persons in New Zealand only. Copyright in this publication is owned by
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