If you are thinking of buying your own home then the Forces Help to Buy (FHTB) scheme might be for you. Aimed at helping armed forces personnel get on the property ladder, FHTB might just be the helping hand you need to step on the housing ladder.
Be Aware that the FHTB scheme and CEA allowance do not work together!!
How much can I borrow?
The scheme allows you to borrow up to 50% of your annual salary to a maximum of £25,000. This can be used towards a deposit and other costs such as solicitor’s and estate agent’s fees.
Who can apply for the scheme?
To apply for the scheme you must:
- Be in Regular service.
- Have completed 2 years service (from enlistment date) and be on trained strength (completed Phase 2 Training).
- Have at least 6 months left to serve (at the time of application).
- Not have owned or currently own a property within 50 miles of the proposed house in the last 12 months (there are some exceptions to this).
- You must meet the right medical requirements.
How do I apply?
To apply for FHTB you must complete the application form on JPA.
How will this be considered during a mortgage applications?
If accepted, you can be given a Personal Information Note by the MoD as evidence of your FHTB advance before seeking a mortgage offer.
How will I receive the payment?
Payment of the FHTB amount is made by BACS direct to your legal representative, who must apply for the funds at least 10 working days before the property completion date.
I currently have a Long Term Advance of Pay (Long Service Advance of Pay) that helped me to purchase my current property. How can I benefit from the FHTB scheme?
If you have LSAP you will continue to make your normal monthly payments but you can apply to extend your loan to the FHTB limit if you are moving home and are eligible under the new rules. In these circumstances your LSAP loan amount will be consolidated into one arrangement under the FHTB scheme.
Can I still apply for Long Term Advance of Pay?
Not at this stage. During the FHTB pilot the LSAP scheme will be frozen, so no new applications can be made to this scheme whilst the FHTB scheme is live (expected to continue through 2018).
Can I still apply for Service accommodation?
If you buy a property using funds from the FHTB scheme and the property is within 50 miles of your current assignment location then you will not be eligible for either SFA or SLA during your current assignment.
If you already know your next assignment (starting within 6 months) and you choose to buy a home within 50 miles of there, you will also not be eligible for either SFA or SLA there.
You may choose to buy a property more than 50 miles from your current assignment location (or next location, if you already know what it is and it starts within 6 months). In this case your family will have to live in that property in the first instance – you will be eligible to use SLA (or SSSA) but not SFA for that assignment.
After buying your property, if your next assignment is more than 50 miles from your purchased home but within the UK, your entitlement to SLA is reinstated. Additionally, assignments to either Northern Ireland or overseas locations will also reinstate entitlements to SFA.
If any subsequent assignment takes you to within 50 miles of the location of your purchased property your entitlement to SLA and SFA will be relinquished and you will be required to live in your own property.
Can I let the property if I am posted elsewhere in the UK or Overseas?
FHTB may not be used to buy a second property in any circumstances, including “buy-to-lets”. The home purchase must be occupied, in the first instance you and / or your immediate family. However, in subsequent postings where you have your entitlement to SFA reinstated, you can apply to your Commanding Officer and Mortgage provider to let out your property. In this case the LSAP interest rates will be applied (currently 2.5%).
Can I receive CEA and have FHTB?
Service Personnel who are in receipt of CEA or are considering CEA in the future must obtain advice before applying for FHTB.
FHTB regulations dictate that the family must reside in the purchased property (unless extenuating circumstances apply). CEA regulations stipulate that the SP must serve accompanied in order to retain CEA unless INVOLSEP has been authorised by PACCC. Therefore an SP serving VOLSEP with family in an SPR purchased with FHTB would not be eligible for CEA.
Where can I get more information?
For more information on the FHTB scheme https://www.gov.uk/guidance/forces-help-to-buy or JSP 464.
For advice on buying your own home from calculating how much you can afford to the process of actually buying your home visit the following link: https://www.citizensadvice.org.uk/wales/housing/moving-and-improving-your-home/buying-a-home/
For further information on the Government Schemes that might help you step on the property ladder visit the following link: https://www.ownyourhome.gov.uk/schemes-all/
If you want to find out more and have questions that you want answered then make sure you attend the next Housing Brief delivered by the Joint Service Housing Advice Service. The next brief in BFG is scheduled to take place on 5 Sep 18 in Sennelager. Keep an eye out for more details nearer the time.
The Joint Service Housing Advice Service also publish an quarterly magazine full of advice and opportunities aimed at the Service community. For the latest magazine go to https://www.gov.uk/government/publications/housing-matters-magazine-2018