Lending terms - minimum deposit

A 5% minimum deposit is required on all equity share cases which can only come from:

• The applicants own resources
• Gift from family/friends (the gift must not be repayable under any circumstance and have no conditions attached)
• A combination of the above is acceptable

The minimum deposit must be based on the reduced price - see example below:

Example based on a 5% deposit
Equity Share 75/25 split (25% retained by equity shareholder)

• Full price/value of £100,000
• Reduced price/value of £75,000
• Maximum loan available £71,250
• LTV = 95% of the reduced price/value

Builder Cashback/Deposit

We will not accept equity share cases where a builder deposit/cashback is offered even if it is in addition to the acceptable deposit sources listed above. If the deposit is found to have come from an unacceptable source and a mortgage offer has been issued this could result in the withdrawal of the offer.

Lending terms - acceptable and unacceptable equity share holders

We will only accept specific types of equity share holders as follows:

Unacceptable equity share holders

The equity share holders listed below are unacceptable:

• Third party investors.
• Individual private vendors.
• Family Members.
• Employers.
• Selling agents.
• Self employed builder or property developer.

Affordability

3% of the equity share loan must be included as an outgoing when calculating affordability, example shown below:

£30,000 equity share loan x 3% = £900
÷ 12 = £75 monthly outgoing for affordability calculation

Other lending terms

• We must have first charge over the whole property.
• The loan agreement under any scheme must not contain a requirement to repay it within 5 years and there must be no interest charged.
• Applicants must be informed that we cannot guarantee to make additional funds available at a later date in order to repay the loan.
• LTV% calculations for both products and credit scoring will be based on the open market price/value.
• Equity share applications only accepted on a capital and repayment basis.
• Applicants who are non-EEA nationals must have indefinite leave to remain.

For information regarding our criteria on Homebuy Direct and FirstBuy please see below.

Interest Rates

Please refer to our current Interest rates and LTV criteria as conditions apply.

Processing of applications

Questionnaires must be completed in addition to the application/DIP form and are available only from the website.

Equity Share Schemes Questionnaire

The questionnaires will help provide all the information needed to process your case more efficiently.

Please send your application and questionnaire to your allocated Service Centre.

HomeBuy Direct (England only)

HomeBuy Direct is a scheme to help first time buyers (in England) purchase specific new build properties. Buyers will be offered an equity share loan, funded jointly by the government through the Homes and Communities Agency and the builder.

The Scheme

• The Homes and Communities Agency and the builder will provide equal equity share loans up to a combined maximum of 30% of the full purchase price.
• The equity share loans will be repaid when the property is sold.
• In addition, an applicant can make repayments of the equity share loans (by purchasing additional shares) after 12 months.
• The equity share loans are interest free for the first 5 years. After that, the interest payable in year 6 is 1.75% of the equity share loan which will be collected on a monthly basis. The interest charge will rise each year by the Retail Price Index (RPI) plus 1%.

Lending Terms

HomeBuy Direct applications will be processed using the same procedures and lending terms as any other acceptable equity share application and must be submitted to your usual

Service Centre on a paper application form together with the Equity Share questionnaire.

Please ensure you refer to our Equity Share Schemes criteria (above) for details of the process and lending terms.

FirstBuy (England only)

The FirstBuy scheme is designed to help first time buyers (in England) purchase a new build property, with funding provided by the government, the Homes and Communities Agency (HCA) and the builder.

The Scheme

• The Homes and Communities Agency and the builder will provide equal equity share loans up to a combined maximum of 20% of the full purchase price.
• The equity share loans will be repaid when the property is sold.
• An applicant can make additional repayments of the equity share loans.
• The equity share loans are interest free for the first 5 years. After that, the interest payable in year 6 is 1.75% of the equity share loan which will be collected on a monthly basis. The interest charge will rise each year by the Retail Price Index (RPI) plus 1%.

Lending Terms

FirstBuy applications will be processed using the same procedures and lending terms as any other acceptable equity share application and must be submitted to your usual

Service Centre on a paper application form together with the Equity Share questionnaire.

Please ensure you refer to our Equity Share Schemes criteria (above) for details of the process and lending terms.