ADF Housing Entitlements – DHOAS, HPAS & HPSEA

Defence Housing Entitlements

As we come from both a property investment and ADF background, we’re in a unique position to discuss the special ADF housing entitlements that you are eligible to receive. These are loosely grouped into two categories – ‘assistance to purchase’ (HPAS/HPSEA) and ‘assistance to repay the loan’ (DHOAS). Now, let’s have a look at both of these – and put the terms against the acronyms. Keep in mind that while the information here is always available in the PACMAN for you to check up anytime, it will not be laid out as simply as this! 

NB: All quoted figures are as of January 2021.

Home Purchase Assistance Scheme (HPAS)

As a member of the ADF, you are eligible for assistance to purchase your own home. HPAS comes in the form of a lump-sum payment of $16,949, before tax. Note that the amount you’re eligible for is affected by your share of ownership of the property (ie – joint ownership with a non-ADF member will see the amount halved).

To be eligible to receive an HPAS payment, you must meet the following criteria:

  1. You must not have received HPAS before; it is payable only once in your entire period of service.
  2. You must purchase a home in your current (or new) posting location.
  3. On the day that you sign contracts, it is expected that you will serve in the location for 12 months after the purchase. Also, this means that you will have to live in the house for the remainder of your posting tenure to that location.
  4. If you are MWD(U), you need to remain in that categorisation for the next 12 months.

The best part? You are eligible to receive this lump sum payment BEFORE you need to pay your deposit as you are considered to have purchased a home when you have signed either the contract to purchase or the agreement for it to be built.


Home Purchase or Sale Expenses Allowance (HPSEA)

While we are strong advocates for a ‘buy and hold’ property strategy, there are some circumstances when it is untenable to continue ownership of a property. HPSEA is an allowance for the reimbursement of reasonable costs to an ADF member when they sell a home at the time they are being posted to a new location; or if they sell in their previous posting location and buy again in the new location.

An example of this would be if you own a home in Sydney, then get posted to Brisbane and want to buy a new home there. You would be eligible to receive HPSEA to reimburse the sale and purchase costs, including real estate agent’s commissions, stamp duty, solicitor’s fees, mortgage costs etc. This is to compensate for the relatively high transactional costs of selling and buying. For this allowance, the amounts that you will receive through HPSEA vary, depending on your costs. All of this is covered in extensive detail within PACMAN.


Defence Home Ownership Assistance Scheme (DHOAS)

The Defence Home Ownership Assistance Scheme was designed to achieve two aims within the ADF – help you and your family achieve home ownership; and to improve recruitment / retention. Fortunately for many of you, this means that you are able to service your loan easier. How is this so? Basically, a DHOAS loan subsidises your home loan, for an amount and period of time based on how long you serve. As of 2020 it contributes a monthly amount between $198 and $397 to your loan. Not bad for just being an eligible ADF member, right? The amount you are entitled to receive varies, based on a three tier system – as seen in the table below and very importantly, you can apply for your final DHOAS certificate up to 5 years after discharge (keep that in mind for later…)

The Australian Average House Price (AHP) is used to determine the subsidised loan limits under the three tiers. Each tier’s subsidised loan limit represents a percentage of the AHP, as shown here:
● Tier 1, is 40% of the AHP
● Tier 2, is 60% of the AHP
● Tier 3, is 80% of the AHP – maximum benefit!

As at 1 July 2020, the AHP is $750,608

Subsidy Tiers for 2020-21

Subsidy TierMinimum Permanent ServiceMinimum Reserve ServiceSubsidied Loan AmountMax. Monthly Subsidy*
14 Years8 Years$300,243Up to $198
28 Years12 Years$450,365Up to $298
312 Years16 Years$600,486Up to $397

*Estimated monthly subsidy values based on the December 2020 median interest rate. These monthly subsidy values fluctuate based on changes in the median interest rate.


So, you can see that the bad news is that you have to wait four years of service before you gain access to DHOAS. We recommend that you wait until you have done at least eight years of service (to achieve tier 2) before you pull the trigger. This is for either of two reasons:

  1. So you can have a higher monthly subsidy (about an extra $100 per month stays in your pocket) or;
  2. So you can use four years of your service in a lump sum – very useful to top up your cash buffer after you have purchased your home.

The real kicker is the main condition of receipt – you and/or your family must occupy the home for at least 12 months and you will need to be occupying the home and holding a valid subsidy certificate before your subsidy payments will commence. Lastly, you need to note the three lenders that have been approved to provide DHOAS loans are:

Defence Bank
Australian Military Bank
NAB – National Australia Bank

Defence Home Ownership Assistance Scheme Lump Sum Option

In addition to the subsidised loan outlined above, you can take up to 4 years worth of DHOAS as a lump sum. You must have at least 4 years of subsidy already (a full time person would have to serve 8 years). Subsidy is at Tier 1 level only (even if you’re entitled to Tier 2 or 3). This equates to $198 per month x 4 years [48 months] = $9,504. The really powerful stuff comes from combining this amount with your respective State First Home Owners Grant (FHOG) + HPAS + DHOAS Lump Sum. For example, an ADF member in QLD would be almost $36,000 after tax!

NOTE: It is a condition of receiving a lump sum that you must not have previously owned your own home or an investment property.
PRO TIP for couples: If you are in a recognised relationship with another ADF member, you are both entitled to DHOAS and can split the loan. 1 example: if you have both served more than 8 years, you can get the subsidy for a loan up to $900,730 (2 x $450,365) and received a monthly allowance of $596 (2 x $298). Now that is a massive chunk off your monthly repayments!!
NB: Considering DHOAS is mandatory principal and interest repayments, regardless of the loan amount, then this is very important to recognise in order to protect your cash flow!

How to use them?

Understanding what they are is just one piece of the puzzle. Understanding how to use them, with special focus on when and where you use them, is key to using them successfully. There are some restrictions, and some tips that you definitely need to know before you pull the trigger.

Have you watched our recent Facebook Live recording? Property coach Robbie Turner shows viewers case studies on exactly what happens when you get it wrong, and how and when to use them to get it right.

Click here to check it out on Facebook or send us a message and we can send it to your email.

This is an excerpt from Robbie's book "The Commando Approach To Property Investing". ADF Members and their families can download their free copy by clicking here.

Axon Property Group Pty Ltd

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