From 1 April 2021 the First Home Fund will re-open for applications from first-time buyers trying to get on the property ladder.

What is the First Home Fund?

The First Home Fund provides loans of up to £25,000 to first-time buyers on both resale and new build properties.

How does the scheme work?

Eligible buyers can apply for up to £25,000, capped at 49% of the lower of (a) the property valuation, or (b) the purchase price.

The amount borrowed will be invested as a percentage share of the property valuation e.g. if you borrow the maximum £25,000 on a property valued at £100,000, the Scottish Government will be due 25% of the sale price as and when you sell the property. Your property must be sold at a minimum of 95% of the market value, otherwise, the Scottish Ministers would require to consent to your sale. There are no monthly payments.

You will own the property outright and hold the full title, subject to security over it in the above terms.

You can repay some of the loan during your ownership and effectively increase your equity share. Several conditions must be met to do this e.g. you must “buy back” a minimum of 5% to achieve equity of up to 90% OR the balance required to take your share to 100% for equity of 90% or higher of the Government’s equity share. The price will be based on a fresh market valuation obtained for this purpose, which is valid for 3 months from the date of issue, and you will be responsible for associated costs with the process.

Eligibility for First Home Fund

Application to the equity loan scheme is available to all first-time buyers in Scotland taking out a mortgage. The scheme is not available to cash buyers.

Only one of the proposed joint purchasers of the new property must be a first-time buyer, defined as never having owned property in the UK or abroad either jointly or solely at any time. However, the scheme is not available if the other joint purchaser still owns property at the time of completion.


The mortgage must be capital repayment and for at least 25% of the purchase price.

The property must be your sole residence.

You cannot apply for any other Scottish Government shared equity schemes e.g. Help to Buy – any other existing application must be closed before applying.

How do I/we apply?

You need to find a property first, so once you have found your dream home you should instruct your Solicitor to make an offer to secure it.

Once you have had an offer accepted on a property, you or your Financial Adviser can fill out the application form on Link Housing. You should also contact your Financial Adviser/lender to start your full mortgage application.

You should do this as soon as possible, and in any event, before your Solicitor concludes the missives for your purchase.

The application is expected to be subject to an administration fee of £550.

What happens next?

If successful you will be issued an Award Letter which is valid for 3 months, which effectively means you must conclude missives for your purchase within 3 months of your application being approved or you will require to begin the application process again will no guarantee of approval.

This scheme may not be right for you – please ensure you take financial advice before proceeding with an application.

For more information about the scheme see the First Home Fund Guidance Leaflet