First Homes Fund: Information for Lenders and Independent Financial Advisers

Application process and evidence required

Before applying to the scheme an offer must have been made and accepted on a property. Applications can be submitted if an offer has been orally accepted, or in the case of new build properties, a plot must have been reserved with the developer. Applications cannot be submitted once missives have been concluded. The offer must be formally accepted (i.e. missives concluded) before any funds are released.

Applications must be submitted via the Administering Agent’s website. Valid applications must be accompanied by details of the applicant’s solicitor, any IFA acting on their behalf, evidence that the mortgage and debt repayments will not exceed 45% of their net disposable income, a Mortgage Decision In Principle, and, for open market sales, a copy of the Home Report. Income is evidenced by 3 months’ payslips for all applicants or an SA302 if self-employed and benefit statements. 

An affordability assessment will be completed by the Administering Agent, to check that the applicant’s monthly mortgage and debt repayment costs do not exceed 45% of their net disposable income. A copy of the sustainability calculator used to complete this assessment can be found via the following link

Application Fee

The Administering Agent will request a fee of £650 when the Award Letter is issued. This must be paid by the applicant at least 3 weeks prior to settlement. Failure to pay the fee will prevent the Scottish Government’s contribution being paid. The application fee cannot be deducted from the Scottish Government’s contribution.

The fee will be refunded in full to the applicant should their application fail at any time, except in cases where there has been misrepresentation or fraud on the part of the applicant.

Award Letter

If the applicant meets the eligibility criteria for the scheme then an Award Letter will be issued to the applicant, their IFA (if applicable), their solicitor and to the Scottish Government’s solicitors.

Missives for the transaction must be concluded within 3 months of the date of the issue of an Award Letter. If the missives are not concluded within this timescale then the application will be cancelled, and the applicant would need to submit a new application if they still wished to receive financial support from scheme.

Following conclusion of missives, a further period of up to 6 months is given to allow settlement of the purchase to take place.

In addition to the Award Letter, the applicant’s solicitor will also be sent a set of Standing Instructions that will be explain what must be done in order to facilitate the transaction. This includes confirming that the applicant is a first-time buyer. The applicant’s solicitor will normally carry out all necessary title and property due diligence on behalf of Scottish Ministers.

Once an Award Letter has been issued a full mortgage application can be submitted, in line with the details contained in the letter. If the applicant has a Help to Buy ISA or a Lifetime ISA then the solicitor will be required to register with the UK Government in accordance with the ISA rules.

Further detail on the application process can be found in the Standing Instructions, which are available here.