Home Equity is a new plan for people like you who want to own their own home, but do not have the deposit right now. It lets you move into a new house with the security of a 5-year occupation agreement and have an option to buy the house at any time during the five years. Home Equity means you can get established in a place you call home, with security of tenure - without a deposit.
 
The weekly payments will be equivalent to a market rent for the property and are set for 5 years. There will not be large increases - in fact payments may only increase by up to 2% a year.
 
You can put down you roots right where you want to live; plant a garden, raise children and become part of the local community. Then when you have the money, you can buy. However if you do leave at any time, you do not get a share of the growth in market value of the property    

When you choose to buy, the purchase is at 75% less than the growth in market value. For example -

Valuation of property on commencement                        $340,000
Original cost of property                                                  $330,000
Market rent assessment per week                                $400-$480
Weekly payment (fixed for up to 5 years)                               $470
Valuation of property at future date                                $390,000
Occupant has deposit as own equity of                             $45,000
 (being 75% of difference in value over the original cost)
Occupant buys property at valuation less equity             $345,000
 
What is Equity?
The equity is 75% of the difference between the original cost of the property and the current market value at the time they purchase. For example, if the property increased by $40,000 between the time you occupied the property and the time you bought it, you would be entitled to receive $30,000 of that value.
 
An independent registered valuer will assess the current market value of the property and a copy of the valuation will be provided to you. On commencement of the occupancy, the original cost of the property will always be less than the valuation, thus some equity is available to you from the day you take occupancy, allowing also for growth in the future.
 
To eventually buy the property outright, you will need to arrange your own mortgage from a bank or other financial institutions.  We can help you to access options for finance, but NZHF does not provide mortgage finance.
 
The properties will generally be new or near new three, four or five bedroom homes on their own sections. They will be brick and tile construction, include a lockable garage, concrete driveway, fencing and clothesline. The houses will also have floor coverings and blinds. In Auckland the average weekly cost is in the range of $400 to $480 per week. The costs per week in other parts of New Zealand will vary.
 
A Bond is required to be paid at the start of the occupation agreement. This will be equal to 3 weeks rent and will be lodged with Tenancy Services. The bond is repaid at the end of the agreement, or when you buy the property, provided the property has been looked after and all weekly payments have been made.
 
What are the benefits of the programme?

• The occupation agreement provides  the same rights as a residential tenancy agreement but with the benefits of owning.
• An absolute right to occupy the home for up to 5 years provided payments are made and the property is looked after.
• The right to purchase the property at the end of the 5 year period at the then current valuation for the property; and 
• The right to share equity gains in the value of the property above the original cost of the property  
  

As with a residential tenancy agreement, you cannot sub let the property to anyone else or make structural changes without the approval of the NZHF.

NZHF will pay land rates, insurance and structural maintenance. The you will pay for electricity, telephone, water, contents insurance and day-to-day upkeep of the property, i.e. mowing the lawns.
 
A home ownership education programme will be a requirement and is to be completed before or shortly after taking occupancy of the property. 

If you would like to apply for Home Equity, you can complete this application form.  You'll need Adobe Acrobat Reader to open and print the file.