HomeFund explained

HomeFund was a scheme set up by the New South Wales state government and operated through co-operative housing societies[1] that allowed people who would not otherwise be able to afford a home to take out loans that would allow them to purchase a home. The scheme was especially targeted at public housing tenants.[2]

The scheme was originally set up by the Labor Party government of Neville Wran in the mid-1980s. Problems started to emerge when the then-new Coalition government of Nick Greiner raised public housing rents[3] and started to market more aggressively toward public housing tenants, with some people receiving 30-year loans even though they were already aged into their 70s and 80s.[4] Interest rates for the scheme rose to around 15.9%, which was somewhat consistent with what other home loan lenders were charging at the time but out of reach of most HomeFund borrowers,[5] with in many cases repayments not even covering interest.[3]

As a result of this, the scheme was restructured in 1993 with the appointment of a HomeFund commissioner to deal with complaints[6] and a program to either move loans to commercial lenders or cap interest rates.[7]

Notes and References

  1. Web site: Australian Trade Practices News 472 1999 . 17 January 2008 . https://archive.today/20120716183735/http://ww5.cch.com.au/atp/atp472.html . 16 July 2012 . dead .
  2. Web site: HomeFund Mortgage Relief Bill – 04/03/1993 – 1R 2R – NSW Parliament Hansard . 17 January 2008 . 9 September 2007 . https://web.archive.org/web/20070909060155/http://parliament.nsw.gov.au/prod/PARLMENT/hansArt.nsf/V3Key/LA19930304005 . dead .
  3. http://www.abc.net.au/rn/talks/8.30/lawrpt/lstories/lr990427.htm ABC Radio National – The Law Report – Tuesday 27 April 1999
  4. Web site: Homefund Borrowers – 15/10/1992 – PRIV – NSW Parliament . 17 January 2008 . 24 May 2011 . https://web.archive.org/web/20110524142036/http://www.parliament.nsw.gov.au/prod/PARLMENT/hansArt.nsf/V3Key/LA19921015038 . dead .
  5. Web site: HomeFund – 01/04/1998 – QWN – NSW Parliament . 17 January 2008 . 24 May 2011 . https://web.archive.org/web/20110524142046/http://www.parliament.nsw.gov.au/prod/PARLMENT/hansArt.nsf/V3Key/LA19980401022 . dead .
  6. http://www.austlii.edu.au/au/legis/nsw/consol_act/hca1993239/ HOMEFUND COMMISSIONER ACT 1993
  7. http://www.austlii.edu.au/au/legis/nsw/consol_act/hra1993279/sch1.html HOMEFUND RESTRUCTURING ACT 1993 – SCHEDULE 1

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