Forces Help to Buy: A Complete Guide
If you're a regular serviceman or servicewoman in the armed forces and you're looking to get onto the property ladder, you should know about the Forces Help to Buy Scheme before it comes to an end in 2018. The Forces Help to Buy scheme is a government affordable housing initiative aimed at helping you to buy a home. It provides you with an interest-free loan for buying your first home, moving to another property on assignment, or as your family's needs change. Here's a handy complete guide to the scheme, covering how it works, who is eligible, how it can benefit you and how to apply. Got a question that isn't in this guide? Check out our comprehensive Forces Help to Buy FAQs for answers to all the commonly asked questions we received about the scheme – and a few less common ones too!
What is it?
The Forces Help to Buy Scheme was established in April 2014. Initially scheduled to run for three years, popular demand has led to it being extended through to 2018.
The scheme lets you borrow as much as 50% of your annual salary, plus any recruitment and retention pay, to a maximum of £25,000 completely interest-free, giving you ten years to make your repayments. This is available anywhere in the UK.
How does it work?
To apply for the loan, you'll need to log on to the Joint Personnel Administration system. Here, you'll also be able to ask questions and check that you're eligible through your Chain of Command and personnel agency.
Once your application is accepted, you'll be given a Personal Information Note by the MoD. This document provides evidence that you've been accepted for a Forces Help to Buy advance, which you'll need when you apply for a mortgage.
After purchasing the property, you'll then be committed to repaying it over the course of ten years. These repayments are made on a monthly basis and automatically come out of your pay. You won't pay any interest, and you can combine the scheme with other government-backed initiatives (with the exception of Help to Buy: Mortgage Guarantee, which closed to new applicants on 31st December 2016).
While the loan is interest-free, you will need to pay for insurance which is deducted automatically from your pay each month. It's typically around £6.50 per month, depending on how much you borrow. The insurance serves the purpose of making sure that any overdue loan will be entirely paid off in the events of a medical discharge or death while still in the UK military.
What kind of property can I buy?
Certain restrictions apply, which are important to bear in mind when searching for property. These restrictions include:
- Location. The property must be located in the UK, Channel Islands or the Isle of Man. It's also acceptable to apply for a loan against the purchase of a property in the Republic of Ireland, but in order to do so, one of your parents must hold an Irish passport.
- Personal use. The property must be bought for either you or your immediate family.
- Type. Forces Help to Buy cannot be used to purchase a houseboat, mobile home or caravan.
- Commercial use. You cannot use the loan to purchase a commercial property.
Who is eligible?
You need to meet the below requirements to apply for the Forces Help to Buy Scheme:
- You should be in regular service
- You should have six months or more left to serve at the time of applying for the loan
- Within the last year (at the time of applying) you should not have owned another property within a 50-mile radius of the home you want to buy
- Meet the appropriate medical categories
If you serve in the Army or RAF, you also need:
- To have served two years from your enlistment date
- To have completed your Phase 2 training
And, if you're in the Marines or Navy, you need:
- To have been accepted onto the trained strength
Note that the rules can change, especially if you have extenuating medical or personal circumstances. You should check with your Chain of Command and personnel agency if you have any extenuating circumstances.