Open Market HomeBuy

There are two Open Market HomeBuy products - MyChoiceHomeBuy and Ownhome offered by appointed equity loan providers.

Last year the Government helped over 6,000 households into home ownership through Open Market HomeBuy, which has been extremely popular with buyers. As a result of high demand, neither CHASE nor Places for People are accepting new applications for MyChoiceHomeBuy and Ownhome.

However, MyChoiceHomeBuy and Ownhome are two of a number of affordable home ownership options.

MyChoiceHomeBuy Product

1. An equity loan of between 15 to 50 per cent of the purchase price is provided by a partnership of eight housing associations named CHASE, each one of which is an equity loan provider.

2. This product can be used in conjunction with a conventional mortgage from a range of qualified lender regulated by the Financial Services Authority.

3. Purchasers may be expected to raise finance to purchase between 50 and 85 per cent of a home on the open market.

4. There will be an annual fee of 1.75 per cent on the equity loan in year one, payable on a monthly basis. The fee will increase annually by the Retail Price Index (RPI) plus one per cent.

5. Purchasers are free to re-mortgage at any time but will need the equity loan provider's consent if the loan is still in place.

Ownhome product

1. An equity loan of between 20 to 40 per cent is provided by Places for People, a Housing Association, in partnership with Co-operative Financial Services.

2. This product must be used in conjunction with a conventional mortgage from the Co-operative Bank in the first instance.

3. Purchasers may be expected to raise finance to purchase between 60 per cent and 80 per cent of a home on the open market.

4. There is no interest charged on the equity loan for the first five years but there will be a charge of 1.75 per cent from year six and 3.75 per cent from year eleven onwards.

5. Purchasers may re-mortgage with a lender other than the Co-operative Bank provided they comply with the terms of their initial mortgage agreement.

Both products

1. The equity loan can be used in conjunction with any deposit the purchaser may have.

2. Owners will need to inform the equity loan provider when they wish to sell and the provider will then arrange the valuation.

3. The loan must be repaid when the property is sold but can also be paid back earlier, as and when the owner can do so. Purchasers will also have to share any increase in the property's value with the equity loan provider. The amount which is repaid will be based on the market value of the home at the date of repayment or sale.

4. Applicants should apply to HomeBuy Agents, who will advise if applicants are eligible and recommend an Independent Financial Advisor for advice on which product best suits their circumstances. Applicants may also apply direct to the equity loan providers. If they do so, they will be required to complete a HomeBuy application form.

There is flexibility within the HomeBuy framework for providers to offer schemes that meet the needs of people with long term disabilities. This includes the option for people to purchase a suitable home on the open market, on a shared ownership basis. Interested applicants need to contact the HomeBuy Agent for the area where they live or if a Key Worker, the area where they work, for further information.

A complete list of HomeBuy Agents and their contact details is available on the Homes and Communities Agency website (external link).