General Eligibility for Home Reach
Home Reach is aimed at helping people who can’t afford to buy a suitable property on the open market. Purchasers are subject to eligibility and affordability requirements.
The general eligibility criteria for Home Reach are as follows:
Buyers must be at least 18 years old
Buyers must have a total household income under £80,000 (£90,000 in London)
Buyers must meet the Homes England affordability and sustainability assessments (see the Homes England calculator guidance for further information)
Buyers are expected to use any savings and assets towards the purchase of their home. This may mean selling assets such as bonds, shares, land and any other financial investments
Buyers in receipt of benefits are eligible for shared ownership provided they meet the Homes England affordability assessment
Self-employed buyers must be able to provide 2-years evidence of their income
Buyers must purchase the maximum share they can reasonably afford within the parameters of the Homes England calculator
Household minimum income must be above £12,000
Shared owners must be first time buyers or:
Not currently own a home suitable for their housing needs
Sell a home not suitable for their housing needs before buying shared ownership
Own a non-residential property that provides their main income source
Buyers must have good credit history and must not have (for more information on acceptable credit for Home Reach please refer to the credit policy):
A mortgage or rent arrears
Other bad debts
County Court Judgements
Buyers must have a minimum 5% deposit towards the share they are purchasing
Buyers may retain a portion of their savings to cover the costs of purchase and moving home (typically up to £5,000). This may include:
Legal fees
Stamp Duty Land Tax where applicable
Mortgage application fees
Valuation fees and any associated moving costs
Home Reach’s Cash Buyers Criteria
If you are a wanting to purchase your share in cash, you must meet the eligibility criteria for shared ownership and the cash and assets contributing towards the purchase must not be sufficient to buy the property outright.
The source of cash being used to purchase their share, will be subject to appropriate money laundering checks and may typically come from:
The sale of an existing property
Inheritance
Cash sum from pension
Relationship breakdown where the customer is being bought out of their existing property
Customers must be able to provide evidence that they are legitimately prevented from raising a mortgage. Evidence must be in the form of:
Credit rating
Letter from a lender
Decision in Principle
Home Reach will pay attention to affordability and sustainability calculations for cash buyers, particularly to check that the rent, service charge, and any other housing costs do not breach 45% of the customers’ net household income (after debts).
Acceptable credit when purchasing with Home Reach
If you are purchasing a Home Reach property with Heylo, all applicants will be subject to a full credit search. We will only run a credit search on you once you have agreed to our privacy policy, giving us consent to do the credit search. If the time lapsed from initial credit search to exchange of contracts is longer than 3-months then we may run further full credit searches after this time.
Heylo use Trans union to run the credit checks, and this will produce a credit score, applications may be declined due to a low credit score. We reserve the right to decline applications based on the following credit requirements.
Arrears of 3 months or more in the last 36 months.
Arrears of 1 month or more in the last 12 months.
Any outstanding CCJ or defaults in the last 6 years.
No IVA/DRO/Bankruptcy or mortgage repossession settled in the last 3 years.
It is not acceptable to lend where we are aware that the applicants are currently bankrupt or subject to a DRO or IVA.
No more than 3 satisfied CCJ totaling less than £1,000.
No more than 3 satisfied defaults totaling less than £1,000.
Any CCJ or defaults registered in the last 12 months (whether satisfied or not).
Criminal convictions (other than minor driving offences) where the conviction has not been spent.
Disqualified directors
Has taken out a payday loan in the last 12 months. (THL direct, Sunny, Lending stream, Safety Net, Peachy etc)
If your application is declined
Where there are two purchasers, and one meets the above credit requirements and one with unacceptable credit, we will review the application if the case meets our affordability checks.
In some exceptional circumstances, where severe life events beyond your control have impacted on your credit history, exceptions may be made and appeal to credit decline can be made with supporting information. Please discuss with your financial adviser or our head of sales team.
Employed
Applicants must be employed for a minimum of 3 months, with probationary period being completed.
Applicants need to be a UK taxpayer.
Self employed
All self-employed purchasers must have a 2 years of trading accounts and these will be provided to Heylo at the reservation stage. If an applicant owns more than a 25% share in a company, they will be assessed as self-employed.
Your home is at risk if you do not keep up repayments on both the mortgage and the rent.
Section for Independent Financial/Mortgage Advisor
Need a copy of our forms:
Download IMA: Cash Purchaser Declaration Form
Download IMA: Purchaser Declaration Form
Please email all completed form to homereach@heylohousing.com including the following information:
Housebuilder
Development Name & Plot Number