How to Apply for a First Home Ownership Scheme Loan: Criteria & Application Forms

Following the announcement last Wednesday that the Bank of South Pacific and the Government of Papua New Guinea have formally signed an agreement to make First Home Ownership Scheme Loans (FHOS) available, BSP have now announced the eligibility criteria and application forms for people to apply for a loan.

Key details of the FHOS

Eligible borrowers will have access to heavily discounted interest rate and preferential loan terms. Below are the key terms of the FHOS:

Eligibility Criteria and how to apply

Eligibility Criteria for a First Home Ownership Scheme Loan
Documents that must be provided in support of the application
How to apply for a First Home Ownership Scheme Loan

Please note: Further eligibility criteria and loan conditions will apply, please seek clarification by visiting the BSP website or a BSP branch.

Commercial terms of the loan

How does the FHOS compare to a standard loan?

The following is a comparison of the commercial terms of a First Home Ownership Scheme Loan versus a typical home loan from one of the major commercial banks in PNG such as BSP or ANZ:

On the basis of the above, the First Home Ownership Scheme Loan provides a large incentive for people searching for their first home to buy in PNG.

However, people considering First Home Ownership Scheme Loans should also bear in mind some of the important terms and conditions attached to the loan. For example, the restrictions on the sale of the property or refinancing of the loan is designed, amongst other things, to keep the house in the family for enjoyment by future generations. In addition, it is expected that this restriction will also prevent people speculating on property price rises and selling homes at a profit.

In addition, the requirement that the home be owner occupied will restrict borrowers from renting the property and this must be borne in mind in case a purchaser anticipates future career moves or other lifestyle changes that might require them to move home.

Finally, borrowers should be aware that the First Home Ownership Scheme Loans are still a commercial arrangement between the borrower and BSP, and are not a form of grant, tax break or other concession by the Government. As such, borrowers will still be expected meet their loan obligations.