HomeFund

HomeFund was a scheme set up by the New South Wales state government and operated through co-operative housing societies [ [http://ww5.cch.com.au/atp/atp472.html Australian Trade Practices News 472 1999] ] that allowed people who would not otherwise be able to afford a home to take out loans that would allow them to purchase a home. The scheme was especially targeted at public housing tenants. [ [http://www.parliament.nsw.gov.au/prod/PARLMENT/hansArt.nsf/V3Key/LA19930304005 HomeFund Mortgage Relief Bill - 04/03/1993 - 1R 2R - NSW Parliament Hansard] ]

The scheme was originally set up by the Australian Labor Party government of Neville Wran in the mid 1980s. Problems started to emerge when the then-new Coalition government of Nick Greiner raised public housing rents [ [http://www.abc.net.au/rn/talks/8.30/lawrpt/lstories/lr990427.htm ABC Radio National - The Law Report - Tuesday April 27, 1999] ] and started to market more aggressively toward public housing tenants, with some people receiving 30-year loans being into their 70s and 80s. [ [http://www.parliament.nsw.gov.au/prod/PARLMENT/hansArt.nsf/V3Key/LA19921015038 Homefund Borrowers - 15/10/1992 - PRIV - NSW Parliament] ] Interest rates for the scheme rose to around 15.9%, which was somewhat consistent with what other home loan lenders were charging at the time but out of reach of most HomeFund borrowers, [ [http://www.parliament.nsw.gov.au/prod/PARLMENT/hansArt.nsf/V3Key/LA19980401022 HomeFund - 01/04/1998 - QWN - NSW Parliament] ] with in many cases repayments not even covering interest. [ [http://www.abc.net.au/rn/talks/8.30/lawrpt/lstories/lr990427.htm ABC Radio National - The Law Report - Tuesday April 27, 1999] ]

As a result of this, the scheme was restructured in 1993 with the appointment of a HomeFund commissioner to deal with complaints [ [http://www.austlii.edu.au/au/legis/nsw/consol_act/hca1993239/ HOMEFUND COMMISSIONER ACT 1993] ] and a program to either move loans to commercial lenders or cap interest rates. [ [http://www.austlii.edu.au/au/legis/nsw/consol_act/hra1993279/sch1.html HOMEFUND RESTRUCTURING ACT 1993 - SCHEDULE 1] ]

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