Forces Help to Buy – Everything You Need to Know
Launched in April 2014, the Forces Help to Buy Scheme is designed to support members of the Armed Forces onto the property ladder. According to the Ministry of Defence, since it came into existence five years ago the scheme has lent more than £280m to more than 18,000 Armed Forces applications.
Originally introduced as a three-year pilot scheme, the initiative has recently been extended until the end of 2022. The Defence Secretary, Ben Wallace, said this extension “demonstrates the value we put on our Armed Forces.”
So, with the scheme running for a further three years, here’s everything you need to know about Forces Help to Buy.
What is Forces Help to Buy?
The Forces Help to Buy scheme is designed to support regular servicemen and servicewomen in the Armed Forces to get onto the property ladder.
The initiative could let you borrow up to 50% of your salary to a maximum of £25,000, interest free. This loan is for buying your first home or moving to another property on assignment or as your family’s needs change.
The loan can be and is intended to assist towards:
- The balance of the purchase price of the home
- Deposit
- Legal fees
- Surveyor’s fees
- Land registration fees
- Estate agent fees
Most major mortgage lenders accept the Forces Help to Buy loan as the deposit for your intended new home. However, there are some exceptions, so it is always best to check before you apply for your mortgage.
Alternatively, if you are planning to use a mortgage broker, make sure you disclose the use of Forces Help to Buy at the outset so that they can subsequently inform potential mortgage providers.
How much can I borrow?
The amount of the Forces Help to Buy approved will be limited to either 50% of gross basic pay (including all forms of recruitment and retention pay) but not allowances; or £25,000, whichever is lower.
Buying a home in Scotland: Read our step-by-step guide
Is Forces Help to Buy for me?
To be eligible, services personnel must fulfil the following criteria:
- You must be in regular service.
- If you serve in the Royal Navy, you must have been accepted onto trained strength.
- If you are in the Army or RAF, you must have completed two years’ service from the date of enlistment and be on trained strength (i.e. completed phase two training).
- You must have at least six months left to serve at the time of application.
Note that you don’t have to be married or have children to apply. Single service personnel can also apply.
Forces Help to Buy is primarily designed for you if you’re a first-time buyer or if you need to move to another property, either because you are assigned elsewhere or as a result of certain extenuating family or medical circumstances.
Property for which Forces Help to Buy has been claimed must be intended for your own immediate occupation, or that of your immediate family. An exception to this applies if you’re in an overseas posting at the time of application and purchase.
Forces Help to Buy is not intended for the purchase of ‘buy-to-let’ properties or any other second property. However, under certain circumstances it can be used to extend or modify an existing property.
It is worth noting that while Forces Help to Buy is not related to other government funded Help to Buy schemes, it can be used in conjunction with the government’s Help to Buy Schemes:
Everything you need to know about Help to Buy (and the recent changes)
How much do I have to pay back?
Your repayments will depend on how much you borrow. Your loan amount is divided over ten years and you pay back that amount monthly. You can also choose to make overpayments.
You can opt to start making the loan repayments straight away, six months after receiving the loan, or in your final ten years of service.
Can I leave the forces after receiving assistance from Forces Help to Buy?
Yes. However, if you are due any terminal benefits (resettlement grant) any outstanding Forces Help to Buy loan balance will be taken automatically from it.
How to apply for Forces Help to Buy assistance
Applying for Forces Help to Buy is easy.
You can apply for the loan online through the Joint Personnel Administration (JPA) system through the ‘Self-Service Application for Forces Help to Buy’.
Full instructions can be found online under the JPA Self Service User Guide - ‘Applying for Pre-Approval for Forces Help to Buy.’
You can seek advice on your application through your chain of command and personnel agency.