More the point I feel is how you intend for the minor to service the loan. Or indeed how you intend to actually get them a loan in the first place.
Aren't there laws about providing credit to minors ?
Is going guarantor on a loan the best thing to be doing ? Or even possible ?
What about income from the property ? There are laws in place to prevent parents holding assets in their children's names as a means to minimise tax. And indeed, aren't there quite severe taxation issues involved ?
Don't get me wrong, I'm not against kids holding property, but I am VERY against kids being put into a financial situation that they have little control over for what ever contrived reason. Especially if things go wrong and everyone gets hurt (including the child's credit rating).
Okay... so how will you finance the property purchase ? (assuming title is in childs name... which it has to be to get the grant - your name cannot be on title if you already own other property)
1. Cash - well if you have enough cash to purchase the property outright and get the 7K/14K for free then not a problem I guess.
2. Mortgage in minor's name - well that isn't going to (legally) happen I don't think.
3. Mortgage in minor's name with guarantee from yourself - from what I've been told this is also not likely to happen. There are credit issues with the minor involved, and other guarantor issues that the regular banks will be very very wary of (public relations nightmare when they have to forclose on the loan because the borrower defaulted and the guarantor loses their house as well). There are non-traditional lenders who may be game enough to take it on however, so it is theoretically possible.
4. Mortgage in your name on property with minor on title. This is a difficult one too, as I also believe that there is a security issue. Banks will generally not lend money against a security held in someone elses name. Again, there may be ways around it, but you will need to look hard I think.
5. Buy using a lease/option - not an option for the FHOG anyway (you don't get title until you exercise the option - by which time the grant may have ended)
6. Buy using a wraparound mortgage - I guess in theory that provided you can convince a wrapper to take on the risk of providing credit to a minor (may be some legal issues there), you could purchase a property this way and get the FHOG.
I think that the FHOG is a nice thing if you can get it, but I question the reasoning behind some of the legal and ethical contortions people will attempt to perform in order to get their hands on this money. Sounds like greed to me. Don't forget to consider the ramifications if things go wrong. Please don't screw things up for your kids through your own greed.
That being said, if someone comes up with an elegant solution to the issue, please share it with us all... it's something a lot of people can benefit from if the right solution is found. Might be worth talking to some professional and getting good advice... pay them to find a way to make it work !