A housing scheme that offers Christchurch families a helping hand into home ownership is being amended to resolve a regulatory issue.
Christchurch City Council today resolved to amend the Christchurch Housing Initiative, Te Whāriki tū-ā-Rongo, from a shared equity loan model to a more traditional shared equity ownership model.
The change will resolve some regulatory issues around how any gained equity is treated under the Credit Contracts and Consumer Finance Act (CCCFA). It does not impact on the Initiative’s aim to help modest income earners get onto the property ladder.
Under this model, the Initiative would hold a registered interest on the title of participants’ properties rather than a second mortgage security.
Head of Strategic Policy Emma Davis says the change will have no financial impact on families taking part in the Initiative. It will also continue to protect the Council’s ability to get a proportional return on properties if there are any capital gain between the time when the Initiative contributes equity and when it is repaid.
The Initiative, which is expected to help about 50 families to buy a home of their own over the next three years, was announced in October 2019. It is being jointly funded by the Government and Christchurch City Council, with each contributing $3 million.
Priority is being given to applicants with household income at, or below, the Christchurch median of $83,000, families, first time buyers and those who would otherwise be unable to enter the housing market.
Penny Taylor, spokeswoman for Habitat for Humanity Christchurch which is administering the scheme, says a number of households have been already been shortlisted to take part in the Initiative.
“They have been waiting for a resolution to this issue and are thrilled it is now able to be sorted. They are one step closer to getting into the local property market.”
It is expected to take up to three months for the changes to be made to the Initiative, with the estimated $22,500 cost for the amendments coming out of the scheme’s existing budget.