Construction Loans
There are special conditions that apply to construction home loans involving multiple draw downs during the building process.
Usually, construction loans involve around four draw down milestones until the home is completed.
You need to apply for an initial Subsidy Certificate to take out your DHOAS Construction Loan and commence DHOAS subsidy assistance.
Your monthly DHOAS payment will be calculated on the amount of your home loan that has been drawn down to meet construction costs - at the time the payment .
If you wish to have your subsidy increase in line with your higher home loan balance following further draw-downs, you need to apply for a new Subsidy Certificate for each draw down and submit it to your Home Loan Provider.
Your Home Loan Provider will advise DVA of your higher home loan balance following another draw-down and DVA will calculate your monthly subsidy based on the higher loan amount.
You will need to continue this process for each draw down until your DHOAS home loan is fully drawn down.
You can apply for as many Subsidy Certificates as necessary to complete the process, as long as you are serving in the ADF.
Please note: You can access only one Subsidy Certificate after you separate from the ADF. You may elect to hold off starting your DHOAS assistance until construction is completed on your home. This way, you will require only one Subsidy Certificate to commence your subsidy payments once you have fully drawn-down on your home loan.
Applying for Multiple Subsidy Certificates
A member can hold only one valid Subsidy Certificate at a time.
Your Home Loan Provider will advise DVA when you have presented a Subsidy Certificate and you have made a draw down on your home loan.
We can then process your application for your next Subsidy Certificate.
Two Year Construction Deadline and 12 Month Occupancy
You have two years from when you first start receiving DHOAS subsidy payments to complete the construction process and to occupy the home, if you want your DHOAS subsidy payments to continue.
Upon completion of construction, once your property is deemed "occupiable" (or after two years of receiving the subsidy, whichever comes first), you are required to occupy the home for 12 months.
If you cannot meet these conditions, your subsidy will stop.
You can re-apply for a new Subsidy Certificate and re-commence subsidy payments if and when you are able to start occupying the home and remain in the property for 12 months.
12 Month Occupancy and Receiving a Posting
If you receive a posting and you are unable to move into your DHOAS-subsidised home once it becomes occupiable (or after two years, whichever comes first), your subsidy payments will cease.
You will be unable to get a waiver on the 12 month occupancy requirement if you cannot live in the home for any period of time before you have to move due to the posting.
However, if you can forewarn DVA of a posting (using the Change of Circumstances form) and you can also occupy the home for a period of time before the posting takes effect, you may receive a waiver on the 12 month occupancy requirement.
Options for Accessing DHOAS During Construction
You can choose to start accessing your DHOAS subsidy payments during the construction process using multiple Subsidy Certificates (as detailed above).
Under this option, your initial subsidy payments will be based on your lower home loan balances until you complete construction and fully draw down.
Another option is to take out your DHOAS construction loan but opt to delay the start of your subsidy payments until the building of your home is completed and your home loan is fully drawn down.
This means from the start of your DHOAS assistance you will receive subsidy payments based on your total home loan balance.
As you will receive DHOAS for as long as you have an accrued entitlement, the start date of receiving DHOAS does not make a difference to the length of time you can receive the subsidy*.
For example, if you are entitled to receive DHOAS for 10 years, you will receive 10 years of monthly payments (on an eligible home loan) from the time you start accessing DHOAS, whether it is now or at a later date.
Members should note that if you elect to start receiving subsidy payments during the construction process you will expend some of your DHOAS entitlement on subsidy payments that are calculated on a lesser home loan amount.
Please note: You can continue to receive DHOAS for as long as you have an accrued entitlement, but if you separate from the ADF before completing 20 years of service your remaining DHOAS payments will be at the Tier 1 level.
Construction Loans and the Lump Sum
If you take out a DHOAS construction loan you may also apply for a lump sum payment, if you have sufficient entitlement and meet the conditions of receiving the payment.
You need to ensure that the application for a Subsidy Certificate that includes your request for a lump sum is submitted before the house you're building is completed and deemed "occupiable".
It is a condition of receiving a lump sum that you must not have previously owned an occupiable home, so if the house you are constructing is deemed occupiable you will not be able to meet this condition.
Please note that once your lump sum is deposited into your home loan it will reduce the amount of your balance.
Any future assessments on the amount you are to be paid in subsidy each month (for example, when you submit an application for a Subsidy Certificate following another construction milestone) will be based on your home loan balance as at the time the new subsidy payments are to commence.