Conditions
An eligible person must meet certain legislative requirements before payment of the subsidy can commence.
Firstly, the person and/or partner/dependent children must not have more than 50 per cent beneficial interest in any property other than the property for which the subsidised loan will be used. Beneficial interest relates to the ownership of a property and is different to the equity a person has in a property. This means that if the title of the property is in your name or jointly with any other immediate member of your family (partner* or children), then you own the property 100%. It should not be confused with the amount of equity you may have in the property i.e. the value of the property less the amount of any mortgage.
Secondly, the house for which the loan is being used must be suitable for the eligible person and their family having regard to size of the house, location to the workplace, and so on. The house may only be used as a residence and may not be used to carry on a business, trade or profession. Most importantly, the eligible person and/or their family must be occupying the home and using that home as the primary place of residence at the time the subsidy commences. The subsidy can't be paid on house purchased overseas.
Thirdly, the title of the house, mortgage documents and loan account, are to be held in the name of the entitled person either solely, or as joint tenants with a spouse (partner or proposed). The property cannot be owned with any other person, nor can the title be held as tenants-in-common. The National Australia Bank (NAB) must hold the first mortgage over the property.
The subsidised home loan under the Defence HomeOwner Scheme may be used to buy, build a house, extend, repair or renovate a house, or to refinance another loan that was used for one of those purposes. The loan cannot be used to buy investment properties or motor vehicles.
* The term "partner" refers to married spouses or defacto partners, as officially defined by Defence. This includes same sex partners whose relationship meets Defence's definition of a defacto relationship.