The Housing Industry Association (HIA) has announced its support of legislation that greenlit the federal government’s First Home Loan Deposit Scheme.

Last week, a Senate committee has recommended that the First Home Loan Deposit Scheme be passed, according to The Canberra Times. Under the scheme, the federal government will act as the guarantor for up to 10,000 first-home buyers a year who had already saved up at least 5% of a deposit.

Graham Wolfe, managing director of the HIA, said the recommendation “will facilitate the next step in making the First Home Loan Deposit Scheme a reality.”

“The bill’s passage means that the National Housing Finance and Investment Corporation (NHFIC) will be able to offer the deposit guarantees that underpin the First Home Loan Deposit Scheme,” he said. “The legislation also establishes a new housing research function within NHFIC, which is supported by $25 million in funding, to examine housing demand, supply and affordability.”

Wolfe said that the HIA has long argued that there needs to be a national approach to helping first home buyers enter the market and to address the time that saving a deposit now takes.

“First home buyers are concerned about the time it takes to save a 20% deposit and the added upfront cost of mortgage insurance when seeking a loan with less than 20 per cent deposit,” he said. “Along with stamp duty and securing finance, the time it takes to save a home deposit remains one of the main barriers to people’s home ownership aspiration.

Wolfe said that the HIA will “continue to work with the Government to see the scheme rolled out from 01 January 2020.”