Last amended: 25 September 2013
Where an applicant has an entitlement to an initial, additional or further advance, that entitlement must be considered first. If such a certificate cannot be issued (eg, because the applicant or spouse own another home), then a Home Support Loan can be considered.
If a certificate for an initial, further or additional advance is issued, it must be presented to the bank. An applicant cannot hold on to a certificate that has been issued as an initial, further or additional advance, and receive a Home Support Loan certificate. Subsection 21A(d) prevents this from happening. If the bank declines to make an initial, further or additional advance available, then that entitlement can be disregarded and a Home Support Loan certificate can be considered.
If the applicant already has outstanding subsidised loan balances and/or entitlement/s (excluding Widow/Widower/Essential Repairs Advances) that exceed $10,000, then a Home Support Loan cannot be approved. Due to the operation of subsection 21A(d), any existing entitlements are included in the $10,000 maximum, unless a Certificate of Entitlement cannot be issued, or the bank has refused such a loan.
It is not intended to penalise any applicant who has a relatively small further or additional advance entitlement. Given the fees and charges associated with establishing such loans, it would be uneconomic for the applicant to proceed, and unreasonable of us to insist. Where an Entitlement amount is below $3,000, or in cases where the remaining term is too marginal (eg under 2 years), then any such entitlement should be disregarded from the $10,000 calculation.