Use the links below to view details of our housing schemes lending criteria:
We accept mortgage applications on a shared ownership basis and the minimum initial share purchased by the applicant we will accept is 25%. The shared ownership rental amount must be included in the affordability calculation as an outgoing when submitting the case.
The applicant's solicitor/conveyancer must confirm to us that the shared ownership lease meets our requirements.
For information about maximum LTV limits please see our loan size and maximum LTV criteria, as conditions apply.Loan size Maximum LTV criteria
Builder cashbacks are acceptable on Shared Ownership applications, subject to the current builder cashback rules.
If additional borrowing is required, it can only be considered for the following loan purposes:
- Structural home improvements
- Non-structural home improvements
- Buy additional share (staircasing)
- Buy final share (staircasing)
- Buy out partner’s interest (non-borrower)
Additional borrowing for debt consolidation is not permitted.
Keying Remortgage Cases
When keying a remortgage application for a Shared Ownership property (including those that require additional borrowing to purchase an additional share or the final share), select ownership type ‘Shared Ownership’ for all cases.
In the Loan Requirements screen, enter the applicant’s estimated current condition value of the share that will be owned on completion, calculated using the percentage share they will own (including any new share now being purchased) against their estimated open market value, and the applicant’s estimated open market value in current condition. NFI Online uses these values to calculate the percentage share that will be owned.
Equity Share LoanLending terms - minimum deposit
We require a minimum deposit of 5% of the full purchase price of the property which can only come from the applicant's own resources, a gift from family or friends, or a combination of both. A completed Gifted Deposit Form is required for all applications where any of the deposit that has been gifted is over 10k.
For British Forces personnel, Long Service Advance of Pay (LSAP) can be used as part of the deposit but must be in addition to the 5% from the above.
Forces Help to Buy scheme loans can be used as part of the deposit, but it must be in addition to the 5% from the above.
The minimum deposit is based on the full purchase price - see example below:
Example based on a 5% deposit
Equity Share Loan 80/20 split (20% retained by Equity Loan shareholder)
- Full price = £100,000
- Equity Share Loan = of £20,000
- 5% deposit = £5,000
- Maximum loan available = £75,000
- LTV = 75% of the full price
Builder cashback/deposit isn't acceptable on Equity Share Loan cases, even if it's in addition to acceptable deposit sources. If the deposit is found to have come from an unacceptable source and a mortgage offer has been issued, the offer may be withdrawn.
Builder incentives are acceptable provided your client provides a minimum 5% deposit from their own resources. This includes legal fees, stamp duty and white goods.
Acceptable Equity Share Loan holders
We will only accept specific types of Equity Share Loan holders as follows:
|Equity Share Loan holder||Max percentage retained by Equity Share Loan holder|
|Volume Builder i.e. regional, national||25%|
|National/Local* Government or Housing Association||50%|
|Help to Buy||20%|
|Help to Buy London||40%|
|First Home Fund: Scotland||49% (up to £25,000)|
*Up to maximum of 50%. Please check specific details of the scheme due to regional variations.
Unacceptable Equity Share Loan holders
The Equity Share Loan holders listed below are unacceptable:
- Third party investors.
- Individual private vendors.
- Family members.
- Selling agents.
- Self-employed builder or property developer.
3% of the Equity Share Loan is included as an outgoing when calculating affordability, example shown below:
£30,000 Equity Share Loan x 3% = £900
÷ 12 = £75 monthly outgoing for affordability calculation
NB. During application NFI Online will calculate the charge automatically based on the loan requirements figures. For more tips and help on keying in Equity Share Loan cases, please read our Equity Share Loan Keying guide.
Other lending terms
- We must have first charge over the whole property.
- There must be no requirement to repay the Equity Share Loan for at least five years and during this period there must be no interest charged on the loan.
- Applicants must be informed that we can't guarantee to make additional funds available at a later date in order to repay the loan.
- LTV% calculations for both products and credit scoring will be based on the open market price/value.
- Equity Share Loan applications only accepted on a capital and repayment basis.
- Equity Share Loan applications are not accepted in combination with any other affordable housing schemes, such as Shared Ownership, Sheltered Housing, or Resale Price Restrictions under a Section 106 Agreement.
- The mortgage term cannot extend beyond the date that the repayment of the equity loan first becomes due, except government schemes which have the automatic right to extend to cover a main mortgage term so their Equity Loan term is the same as the main mortgage. This only relates to the repayment of the equity loan capital and not the interest.
- We can't accept remortgage applications where an existing Equity Share Loan will continue. Remortgage applications where the Equity Share Loan is to be redeemed in full can proceed as a standard remortgage application.
- Equity Loans with clauses preventing the borrower from repaying the Equity Loan, sometimes called a 'Golden Share' aren't acceptable.
Equity Share Loan mortgages are available on Nationwide dedicated equity share purchase products.
Help to Buy (England and Wales only)
Please ensure your application meets the requirements for the Help to Buy scheme in the relevant area. E.g. Help to Buy England don't allow a builder's part exchange in conjunction with Help to Buy.
- The property being purchased must be your client's main residence and therefore can't be a second home or a Buy to Let property.
- Your client can't own another or hold an interest in another property at the time of purchase.
- Only available on New Build properties. Properties which have been previously occupied (by an owner or tenant) can't be purchased on the Help to Buy scheme.
- Properties which are subject to a Section 106 or Section 75 agreement aren't eligible.
- Acceptable builder incentives are listed on our New Build page.
- Applications will be processed using the same procedures and lending terms as any other Equity Share Loan application. Please refer to our Equity Share Loan Schemes criteria.
- Scottish First Home Fund applications should be keyed using the Help to Buy scheme code in NFI Online. Both second hand and New Build properties are acceptable when using the First Home Fund, otherwise, all other criteria applies.
|Equity Shareholder Name||Maximum purchase price||Interest/fees||Repayment|
|England||Home and Communities Agency||£600,000||Interest free and carries no fees for the first five years. From year six a fee of 1.75% is payable, which rises annually by RPI inflation plus 1%.||Can be repaid at any time within the mortgage term, or on sale of the property.|
|Wales||Help to Buy (Wales) Limited||£300,000||Interest only, with a £1 monthly administration charge payable in the first five years. From year six interest of 1.75% is payable on the equity loan, which rises annually by RPI inflation plus 1%.|
|The Scottish Ministers||First Home Fund - no maximum threshold price||Interest free and carries no fees for the lifetime of the loan.|
Helping your clients pay off their Help to Buy equity loan
Your remortgage clients can capital raise up to 90% LTV for the sole purpose of paying off a Help to Buy equity loan in full. This helps your clients who are reaching their 5 year Help to Buy anniversary, as they'll soon have to start paying interest on the loan and puts them on the road to full home ownership.
- If your clients are looking to borrow between 80% and 90% LTV, we'll now ask you to select the ownership type as 'Standard' within the Loan Requirements screen. Where the question asks, 'Does this application relate to a Nationwide or External Scheme?' You'll need to select 'Help to Buy'.
- Following this, you'll need to select 'Pay off second charge' within the Additional Borrowing screen, which will enable you to access the products.
- Then key both existing loans (i.e. the mortgage with another lender and the Help to Buy equity loan) with a £0 balance. This will instruct the Conveyancer to ensure that both loans are redeemed.
- Applications below 80% LTV should be keyed as 'Standard'. There is no need to select a Nationwide or External Scheme option and you should select 'No' to this question.
Helping your clients pay off an equity loan with another provider
- If your clients are remortgaging to pay off another equity loan provider, the case should be keyed as standard. There is no need to select a 'Nationwide' or 'External Scheme' option. In the additional borrowing section, select pay off second charge (This will restrict the maximum loan to 80% LTV).
Forces Help to Buy (FHTB)
|A maximum of two FHTB loans can be used per application.||
Purchases - the Personal Information Note (PIN) will be required to evidence deposit.
Remortgages - the applicant's payslip will evidence the total monthly FHTB outgoing.
|If the maximum product limits available at the time mean the FHTB is insufficient to meet the shortfall between the purchase price and the maximum available loan, then an additional deposit will be required.|
|Monthly repayment including the mandatory insurance payment must be included in affordability calculation, this will be confirmed from the Personal Information Note (PIN) as issued to your client by the MoD.|
|Is accepted in conjunction with Help to Buy Equity Loan schemes or Shared Ownership (FHTB loan does not count towards minimum deposit requirements).|
|Not accepted in conjunction with Genuine Bargain Price, Right to Buy or Restricted Resale Price.|
Right to Buy Purchase
We can lend up to 100% of the discounted purchase price. We can also lend additional amounts for home improvements and up to £500 for legal fees.
Debt consolidation is not available on new Right to Buy properties.
If an applicant is in receipt of Housing Benefit this cannot be used as income to support the mortgage as it will not continue once the mortgage has completed. Even if the DWP agree to pay ISMI in its place this is not a form of income we will accept.
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