First Homes Fund: how to apply
If you are buying your first home in Scotland, the First Homes Fund could contribute up to £10,000 towards the cost. Find out if you are eligible and how to apply.
Supporting information
How shared equity works
The First Homes Fund is a shared equity scheme. We contribute an equity loan with no monthly payments or interest. You own your home outright and are responsible for all maintenance, insurance, repairs and running costs.
Our equity stake is our contribution as a percentage of your home's value or buying price, whichever is lower, rounded to two decimal places.
For example, if we contribute £10,000 towards a home valued at £100,000, we hold a 10% equity stake - even if you pay more than the valuation price.
When you sell, we receive our equity percentage of the sale price or current value, whichever is higher. If you increase your share before selling, we receive our percentage of the property's value at that time.
Buying above valuation
You can pay above the valuation in cash. If you do, our equity stake is still based on the valuation figure, not the buying price.
For example:
- property valuation: £100,000
- buying price: £108,000
- your contribution: £98,000 (including any deposit your lender requires, plus the £8,000 above valuation)
- our contribution: £10,000
- our equity stake: 10% (based on valuation, not buying price)
Paying above valuation can put you in negative equity. This means you owe more than your home is worth.
Increasing your share
You can increase your share at any time in increments of 5% or more. You pay based on the property's current value at the time. Contact the administering agent before you begin – all costs are your responsibility.
If your share is already 90% or more, any further increase must take you to 100%.
For example, say you bought at £100,000 with a 90% share and the property is now worth £150,000. Our 10% stake is now worth £15,000. As you have a 90% share this would cost you £15,000 to increase to 100% ownership.
You'll need a property valuation before you can increase your share. You have three months from the valuation date to complete the increase and make payment.
Selling your home
Contact the administering agent before putting your property on the market. All selling costs are your responsibility – your solicitor will confirm what these are. These costs are not taken from the sale proceeds.
When you sell, we each receive a percentage matching our ownership share. For example, if we own 10% and you sell for £200,000, we receive £20,000 and you receive £180,000. If your property falls in value, the same percentage split applies.
You need our agreement to sell for less than 95% of the current value.
For more information on increasing your share or selling, see the post-sale information for buyers and the guidance on after sale shared equity procedures.
Guidance for professionals
Contact
Email: firsthomesfund@linksharedequity.co.uk
Telephone: 0330 024 1321