Victorian Homebuyer Fund - 7 Steps to Qualify, Benefits, Pitfalls & Real-Life Example

Buying a home in Victoria can feel out of reach — especially with property prices climbing across the Mornington Peninsula. Many first-home buyers spend years saving for a 20% deposit, only to see prices rise faster than their savings.

The Victorian Homebuyer Fund (VHF) is a shared equity scheme that can help you enter the property market sooner with as little as a 5% deposit. But while it offers opportunities, it also comes with conditions and long-term consequences you need to understand before jumping in.

In this article, I’ll cover the essentials — the 7 steps to qualify, the benefits, the pitfalls, and a quick real-life example. For a full, detailed breakdown, make sure you watch our video. 

DOWNLOAD YOUR FREE CHECKLIST HERE!

What Is the Victorian Homebuyer Fund?

The VHF is a shared equity scheme introduced by the Victorian Government. Here’s how it works:

• The government contributes up to 25% of the purchase price (35% for eligible Aboriginal and Torres Strait Islander buyers).

• You contribute a minimum 5% deposit.

• You borrow the rest from a participating lender.

• In return, the government holds an equivalent share in your property.

This means when you sell, refinance, or repay the contribution, the government’s share reflects your home’s current market value — not the original purchase price.

7 Steps to Qualify for the Victorian Homebuyer Fund

Not everyone can apply. Here are the key requirements you must meet:

1. Australian or NZ citizen or permanent resident

2. 18 years or older at settlement

3. 5% minimum deposit (3.5% for Indigenous buyers)

4. Income limit: up to $140,230 for singles / $224,370 for couples

5. No current or past property ownership in Australia

6. Buy within property price caps and from an unrelated seller

7. Principal place of residence for at least 2 years

👉 Tip: Get provisional approval before house-hunting to avoid disappointment.

DOWNLOAD YOUR FREE CHECKLIST HERE!

Benefits of the Victorian Homebuyer Fund

There are some clear advantages:

• Buy sooner with a smaller deposit

• No Lenders Mortgage Insurance (LMI)

• Lower repayments thanks to a reduced loan size

• No interest on the government’s contribution

• Potential to buy in a better location

Pitfalls to watch out for

But there are catches that buyers often overlook:

• You share capital gains — if your property value rises, the government’s share rises too

• You share losses if values fall, reducing your equity

• Strict obligations: annual reviews, property upkeep, insurance, and notifying the SRO before selling

• Future impact: you may have less equity for your next purchase compared to owning 100%

This is where many families are caught by surprise when it comes time to sell.

Check out our video below to see how buying a home for $700,000 and selling it for $800,000 looks in 5 years time.

Is the Victorian Homebuyer Fund Right for You?

This scheme is ideal for:

• First-home buyers with strong income but low savings

• Families happy to stay in their home long-term

• Buyers who want to avoid LMI and lower repayments

It may not suit:

• Short-term buyers planning to sell quickly

• Those hoping to flip a property for fast profits

• Investors (scheme is only for owner-occupiers)

Why You Need to Plan Ahead

The VHF is a helpful tool, but it’s not just about getting into the market — it’s about planning for the future. Ask yourself:

• How will sharing capital growth affect your ability to upgrade later?

• Can you repay the government’s share early to build equity?

• Would saving longer for a traditional loan work better for your family?

DOWNLOAD YOUR FREE CHECKLIST HERE!

The Victorian Homebuyer Fund can be the key to getting into your first home sooner — but only if you understand the rules and obligations.

Before applying, make sure you weigh the benefits, understand the pitfalls, and think about the impact on your future property goals.

For a deeper dive — including more detailed calculations and real-world tips — watch our video on the Victorian Homebuyer Fund below.

And if you’d like personalised advice on buying or selling on the Mornington Peninsula, get in touch with one of our friendly team members at McNeill Real Estate. We’re here to help you buy smarter and move with confidence.

Disclaimer: The contents of this video do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. You should seek legal advice or other professional advice in relation to any particular matters you or your organisation may have.