Armed forces home ownership scheme (AFHOS)
This content applies to England only.
Housing laws vary between England and Scotland. Get advice relating to Scotland
In January 2010, the Armed Forces Home Ownership Scheme (AFHOS) was launched to help service personnel to buy property on the open market anywhere in England. This scheme is only available to serving members of the armed forces, and will run until spring 2013. Funding for the scheme is limited each year.
Armed forces personnel may also be eligible for help through other home ownership schemes, including those aimed at key workers.
What are the benefits of this scheme?
As a serving member of the armed forces, you may be eligible for help with buying a home using an equity loan of between 15 and 50 per cent of the value of the property. You will need to raise the rest of the money through a mortgage and/or savings. There are no charges to pay towards the equity loan while you are a serving member ofthe armed forces.
A feature of the scheme is that you should be able to rent out the property when you are in service, providing your mortgage lender agrees. This may be useful if you are posted overseas or elsewhere in the UK.
What is an equity loan?
An equity loan is a loan that must be repaid when you sell the property. The value of the loan goes up and down as a proportion of the value of the property. If you borrow 50 per cent of the value of property at purchase, you will have to repay 50 per cent of the value at the time of sale.
For example, if you pay £200,000 and you get an equity loan for 50 per cent of this (£100,000), when you come to sell you will have to repay 50 per cent of the sale price. So, if the property sells for £250,000, you will need to repay £125,000.
On the other hand, if the value of the property has fallen and you sell it for £150,000, then you will only need to repay £75,000.
Who owns the property?
If you buy a property using the scheme, you will own the property. The mortgage provider will have a charge against the property and the equity loan provider will have a second charge. When you sell, you will have to repay any money you owe them.
Am I eligible for AFHOS?
To be eligible for this scheme, you will need to be a regular member of the armed forces with not less than four years service, and not more than six years. You will also have to show that you have a good credit history and that you have enough savings to pay a deposit, legal fees, stamp duty and other costs involved in buying. The AFHOS website has more information.
How can I join this scheme?
To join the AFHOS scheme, you will need to apply through the AFHOS website. Applications are dealt with by Swaythling Housing Society. Funding for the scheme is limited and applications are taken on a first come, first served basis.
