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Forces Help To Buy

Introduction to Forces Help To Buy Scheme

The Forces Help to Buy Scheme (FHTB) was launched on 1 April 2014 as a three year pilot scheme and was introduced to encourage and support home ownership for Service personnel. The scheme has recently been extended for a further three years to December 2022.

The previous Long Service Advance of Pay (LSAP) scheme is currently frozen to new applicants however, existing LSAP beneficiaries may be able to apply for a new FHTB advance as long as they can meet the meet the requirements however, the FHTB would be abated by the outstanding balance of the previous LSAP loan.

Benefits of the Forces Help To Buy Scheme

FHTB is for the benefit of first-time buyers or for those needing to move to another property, either because they are posted to another location or as a result of certain qualifying family or medical circumstances.  In the latter, FHTB can be used to modify or extend a property already owned.

When can't the Forces Help To Buy Scheme be used?

FHTB is not intended for the purchase of ‘buy-to-let’ properties or any other second property, but under certain circumstances can be used to extend or modify an existing property. FHTB define letting a property when receiving rent under a formal rental agreement, such as Short Term Let, Short Hold Tenancy Agreement, a Holiday Let and so on.

FHTB cannot be used to purchase a mobile home, houseboat or caravan.

Eligibility and Application

Eligible applicants are granted an interest free advance recoverable from pay and terminal benefits. More information of the amount of funds available from FHTB and calculations used to determine that are provided to forces personnel on their internal JPA system.

Any property purchased with FHTB has to be for personal occupation of service personnel and their immediate family.

To be eligible forces personnel must fulfill certain criteria. All information can be found by forces personnel on their internal JPA system.

Applicants do not have to be married or have children. Single forces personnel are also eligible.

Two or more personnel may each obtain FHTB for the joint purchase of the same property, however, there is no guarantee that a mortgage lender will accept two FHTB advances towards the purchase of a single property.

Can other benefits be used in conjunction with FHTB?

FHTB can be used alongside other Government funded Help to Buy schemes and shared ownership properties.

Do mortgage lenders accept FHTB?

Most major mortgage lenders accept and recognise FHTB loan to be used as the deposit for purchase of a new home. Please do however note that FHTB cannot be used as an exchange deposit.  Like a mortgage advance, if the purchase transaction fail to complete, FHTB has to be returned to the provider.  It cannot be held.

Will FHTB be a second charge on my property?

No. Forces personnel must agree to sign a Promissory Note agreeing to repay the FHTB advance. This will be forwarded to the applicant’s solicitor once entitlement to FHTB has been agreed. The Solicitor will forward this for signature to the applicant prior to the payment of the FHTB. Failure to sign and return the Promissory Note to the solicitor will result in non-payment of the FHTB.

What if I would like to sell/ re-mortgage or transfer my property in the future?

FHTB must be repaid immediately and in full upon a sale of the property or alternatively transferred to another qualifying property.  FHTB should be informed immediately if service personnel intend to sell / market the property. Failure to report the sale or disposal of the property or to repay the outstanding balance immediately, will be regarded as a breach of the regulations.

Where a recipient of FHTB wishes to re-mortgage, service personnel must notify FHTB prior to taking any further advance of monies against the property. The sum of the mortgage plus the outstanding FHTB should not exceed the value of the property. FHTB will require either a copy of the valuation for the re-mortgage or confirmation from the lender that they are willing to lend the additional monies without requiring a formal revaluation or a copy of the mortgage offer in lieu of a valuation report. Should the value of the mortgage, plus the amount secured as a second mortgage, plus the outstanding FHTB exceed the value of the property the FHTB must be repaid in full.

In circumstances where the re-mortgage is simply to change mortgage provider to benefit from a lower interest rate for example and the value of the outstanding mortgage is not increased, then the re-mortgage can proceed.

Recipients of FHTB will be asked periodically to confirm that the property has not been let, disposed of or sold.

What is the process for repayment of FHTB?

Repayment of FHTB is dependent on an individual basis and the number of year’s service remaining.  Monthly repayments are calculated on that basis and the applicants provided with a monthly payment amount. The rate of repayment can be increased if requested but cannot be reduced. Full or part repayment of the outstanding balance is also allowed at any time during service.  

What discounts do Glanvilles LLP offer the Armed Forces Community?

Glanvilles offer the Armed Forces community discount within our Divorce and Family services, Wills Trust and Probate Services and our Residential Property services. Our discount options can be found online at the Defence Discount Service website.