First Homes Fund: Administrative Procedures

Annex A

First Homes Fund – Scheme Overview

Scheme type

Shared Equity with a monetary amount (up to £10K) expressed as a % equity stake.

Scheme name

First Homes Fund

Launch

w/b 22 June 2026

Open to

All first time buyers

FTB definition

For the purpose of this scheme, a first-time buyer is a person who does not own nor has previously owned a dwelling in Scotland, the rest of the UK or the rest of the world. All forms of ownership in the applicable legal system which are equivalent to ownership in Scotland are treated as ownership for this purpose. For joint applicants, only one applicant needs to be a first time buyer provided that none of the applicants owns a property at the point of completing the purchase through the shared equity scheme.

Main residence

All applicants must reside in the property as their main residence. There will be a corresponding prohibition on letting, lodgers, sharing occupation etc.

Property

Newbuild and existing properties.

Price cap

£300k

Valuation

The Scottish Government’s equity stake is calculated as a % of purchase price or valuation whichever is the lower. Any above value purchase amount must be cash funded. For new build purchases the Administering Agent will receive a property valuation with the Solicitor’s Confirmation Letter. The Home Report should be attached at application stage for all existing property purchases sold on the open market or if it is an off-market sale a valuation will require to be attached.

Property standard

Above tolerable standard

Property alterations

Permission is not required for alterations assuming all planning requirements are satisfied and the Scottish Government will benefit from the resulting uplift in value. If an owner wishes to borrow in excess of their original mortgage to pay for home improvements, either with their existing or a new lender, then Scottish Ministers consent is required.

Builder incentives

No restrictions on builder incentives for newbuild purchases and assisted purchase is permitted but part exchange is not permitted.

Maximum Scottish Government equity stake

Scottish Government equity stake cannot be more than 49% of the property value or purchase price, whichever is the lower.

Interest on equity loan

No interest will be charged on the Scottish Government stake at any point. See Shared Equity Schemes Post Sales Information for Buyers for more information.

Sustainability check

Yes. Sustainability Calculator will test and ensure home ownership is affordable and sustainable for buyers in the long term.

Cash buyers

Not allowed

Minimum mortgage

25% of purchase price - same as previous First Home Fund and Help to Buy (HTB) schemes.

Deposit

No deposit required by Scottish Government. However, lenders may require a deposit (some around 5%) and any amount over valuation must be cash funded.

Mortgage type

Capital repayment

Award of assistance

One award per property purchase, not per first-time buyer

Transaction sequence and timing

Applicants to identify and make an offer on a property before applying to the scheme. Scheme approval will be given for a 3-month period, within which missives should be concluded. A further 6-month period will be available for settlement after missives conclude. This allows for the longer period needed to complete new build purchases.

The 3 month period starts from when an Approval Letter (similar to an Authority To Proceed) is issued. Missives must be concluded within 3 months of the date the letter is issued and settlement must occur within 6 months of missives being concluded.

IFA

No requirement for applications to be submitted via an IFA

ISA savings/ contributions

Applicants will be able to combine contributions from the UK Government’s Help to Buy ISA or the Lifetime ISA with support from this scheme.

Grant/Section 75

No prohibition on purchase of properties which have been built with public funding/ grant or through section 75 agreements.

Administration fee

£650

Managing eligibility

Scottish Government or their Agents to continue to manage eligibility for the equity loan as they currently do for LIFT schemes. Lenders would only provide advice and determine eligibly for their mortgage products.

Minimum Scottish Government equity stake

This would be subject to individual lender requirements if they require to have a minimum stake identified.

Loan repayable “at any time”

The customer can repay equity loan at any time during its term, on sale of property, on death, or if in breach of contract.

Duration and volume

The first phase will open to applications by the end of June 2026 and is expected to support 2,000 households, with 50,000 households supported over the course of this Parliament.