It seems that the banks are getting more cautious with NRAS properties, too, according to this article.
http://www.smh.com.au/business/property/bank-blacklist-puts-floor-under-risk-20110911-1k455.html
The article appeared in all the Fairfax media and it's just flat out incorrect in regards to NRAS- and this quote especially, is a doozy and tells you all you need to know about the articles research and accuracy
"A list of ''unacceptable'' buildings obtained by BusinessDay, circulated by one of the big four banks to its mortgage brokers late in 2010, bars finance for all developments associated with the federal government's National Rental Affordability Scheme, an initiative designed to boost housing for low-income earners around the country"
They're talking about Westpac, and just a few weeks after that email was circulated, they rescinded it and circulated another email to brokers, saying they had approved six NRAS consortiums. This has been discussed on these threads extensively, previously
Westpac even has a specific NRAS product !!! Its available right now.
"Most other banks have also refused to finance investors or buyers for NRAS properties, apart from St George, which accepts borrowers for one project in Queensland"
The fact they call NRAS consortiums "projects" is another hint they've done about 17 seconds of research into NRAS finance
Each consortium owns NRAS allocations across multiple developments, for starters, and St George has approved six different consortiums (exactly the same as Westpac, because they are owned by Westpac) meaning there are literally dozens an dozens of different properties within different developments associated with those six consortiums, against which they WILL lend.
If you go back through this thread you'll see Ive detailed which banks lend against which consortiums, but will outline it again so everyone is across the facts, rather than the myths, around NRAS lending.
Westpac, ST George and RAMS - all owned by Westpac. They have approved 6 NRAS consortiums; Queensland Affordable Housing Consortium, Brisbane Housing Company, Yaran Residential Investments, Aspire Housing, Affordable Management Corporation and Questus. They go to 90% LVR for everyone except QAHC and BHC- which operate Head Lease Agreement models. For those two models, they go to 85% LVR. They use the discounted NRAS rental for servicing and do NOT accept the NRAS incentive for servicing. FYI -St G also assess any existing debts you may have , such as other INV loans or PPOR loans, at their benchmark rates , and at Principle and Interest. This can cripple your borrowing capacity! The other two assess existing debts as actual repayments, with no loading. So in a nutshell, Westpac or Rams offer far better borrowing capacity than STG if you need a high LVR loan.
NAB - used to be hit and miss, but they are getting more consistent. You can usually get them to do an NRAS deal for 4 consortiums - QAHC, Aspire, Questus and Ethan Affordable Housing. Maximum LVR is generally 75%. They use the discounted NRAS rental for servicing and they do NOT accept the NRAS incentive for servicing. They assess existing debts as actual repayments, like Westpac and Rams- no loading. So for deals where you need 75% LVR or less- they are worth considering alongside Westpac and Rams.
Firstmac. - 7 consortiums approved. QAHC, Questus, Aspire, UAHA, Ethan, AMC and Quantum Housing. They offer 80% LVR. They accept the discounted rental income for servicing but importantly, the also DO accept the NRAS incentive for servicing. They are the only lender to do so, and like Westpac, Rams and NAB, they also assess existing debts as actual repayments. So if you have plans to buy more than one of these over the coming years and have enough equity to keep deals below 80% LVR, they are the best bet from a borrowing capacity perspective, by a country mile.
They also do unconditional Off The Plan loan approvals which are valid for 18 months- taking all the risks associated with OTP purchases ( as outlined in the article, and all too common) completely off the table.
Adelaide Bank , Wide Bay, BOQ, Bankwest - they do bits and pieces- but at best its pot luck with them. Forget ANZ or CBA or anyone else, unless you have a deal done by exception.
So all things being equal, it comes down to this. If you want finance for NRAS, only 5 lenders are serious options, and have a wide range of NRAS consortiums approved. Westpac, ST G , Rams, NAB and Firstmac. Trying to obtain finance anywhere else is pure pot luck, at best.
It really comes down to probably two preferred options, depending on the LVR you need :
Option 1 The Westpac "family" is where you have to go for anything above 80% - you have 3 lender options and they have approved 6 consortiums, so you have quite a bit of choice. Remember though-of the three lenders in the family, St G is the least attractive from a borrowing capacity perspective. That leaves Westpac or Rams as probably the best of the bunch above 80%
Option 2 is applicable to any investor with enough equity to keep the NRAS deal at 80% or below - In addition to the Westpac family, Firstmac and NAB become alternative choices here. From a pure borrowing capacity perspective, firstmac is the obvious choice. They offer the best borrowing capacity by far and have the widest number of NRAS models approved. They also do the 18 month OTP lending- so for anyone considering an NRAS OTP purchase - they're basically the only sensible choice. For anyone considering multiple NRAS purchases they're probably also the most sensible choice. But if you dont need them for their OTP policy or their borrowing capacity, you still have 4 solid other options.
So - 3 finance options above 80%. 5 finance options below 80%.
I hope this helps with understanding the finance options available for NRAS