Forces Help to Buy: Buy, Sell, or Repay
- Forces Help to Buy is a government scheme used by over 27,500 service personnel. The scheme was made permanent from the 1st of January 2023.
- Members of the armed forces (Army, Navy, Air Force) can get an interest-free loan of up to 50% of their annual salary, capped at £25,000.
- Applicants must have more than 6 months left to serve and cannot be reservists or members of the Military Provost Guard Service.
- The conveyancing process is similar to a standard property purchase, but the involvement of the Joint Service Housing Advice Office (JSHAO) is required.
What is the Forces Help to Buy scheme?
The Forces Help to Buy scheme is a government initiative aiming to address the low rates of homeownership within the armed forces.
Military personnel often face unique financial challenges such as frequent relocations or potential operational deployments, so the scheme is designed to make homeownership more accessible.
The government provides an interest-free loan of up to 50% of your annual salary, capped at £25,000.
The eligibility rules
- Be a regular serving member of the armed forces: This means you must be a full-time member of the Army, Navy, or Air Force.
- Not be a reservist or member of the Military Provost Guard Service.
- Have more than 6 months left to serve at the time of application.
- Meet the right medical categories.
How much can I borrow?
Can borrow as much as 50% of your yearly salary before tax, up to £25,000. This money can be used towards a deposit, legal fees, and other costs associated with buying a property.
It's important to note that the loan is interest-free, but it must be repaid over a maximum of 10 years. Repayments will be deducted directly from your military salary.
Can I buy any house?
There are no restrictions on the type of property you can buy with the Forces Help to Buy scheme - you can buy a variety of property types such as houses, flats, and new-build homes.
However, the property must be located in the UK. The loan can only be used to buy a home you or your family will live in – not a buy-to-let property.
Can I get a normal mortgage?
Personnel can get a normal mortgage using the Forces Help to Buy scheme. This mortgage will typically be a traditional residential mortgage, with terms and conditions similar to those offered to civilians.
Many lenders are familiar with the financial situations of military personnel and offer specialised mortgage products. Here are some things to consider when applying for a normal mortgage as military personnel:
- Military personnel generally have a stable income and job security, which can be attractive to lenders.
- Regular paychecks and allowances can help demonstrate a consistent income stream.
- Frequent transfers can sometimes complicate the mortgage process, but lenders understand this and may require additional documentation.
Is the conveyancing process different for Forces Help to Buy?
Buying with Forces Help to Buy
The conveyancing process for a Forces Help to Buy purchase is similar to a standard property purchase but with some key differences:
Joint Service Housing Advice Office (JSHAO)
The JSHAO plays a crucial role, in handling the interest-free loan application and ensuring compliance with the scheme's terms and conditions. Your conveyancing solicitor must coordinate with the JSHAO for a smooth transaction.
Timeframes
The Forces Help to Buy scheme has specific timeframes for drawdown and completion. Your conveyancing solicitor should work efficiently to meet these deadlines and avoid delays.
After your application receives approval from the JSHAO, you usually have two weeks to complete the drawdown process. This means you must finalise the property purchase and secure a mortgage within this timeframe.
Missing the drawdown deadline could jeopardise the entire transaction and result in losing the interest-free loan.
Additional documentation and complexities
Due to the nature of the scheme, your conveyancing solicitor may require additional documentation, such as proof of service and income, to comply with lender requirements.
Military personnel often face unique challenges, such as frequent relocations and potential operational deployments. Your conveyancing solicitor will need to consider these factors and provide appropriate advice.
How and when do you apply for Forces Help to Buy?
Service personnel apply through the Joint Personnel Administration (JPA) portal through the Defence Gateway. Alternatively, you can seek guidance from your chain of command or contact the Joint Service Housing Advice Office (JSHAO).
Once the application is submitted, the JSHAO will assess your eligibility and the process can start.
The best time to apply for the Forces Help to Buy scheme is as early as possible in your home-buying process. This allows ample time for your application to be processed and the interest-free loan to be approved.
What can I do to prepare?
The application process can take time, so be patient and stay in regular contact with the JSHAO.
Keep all your relevant documents organised (payslips, proof of income, proof of identity, proof of address, military service documents).
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