What the First Homes Fund is
The First Homes Fund is a Scottish Government shared equity scheme for first-time buyers. It opened on 24 June 2026. It can put up to £10,000 towards a home worth up to £300,000, and in return the Scottish Government takes an equity stake in the property rather than charging interest or asking for monthly repayments.
It is worth being precise about the name, because two schemes are easily confused. The older First Home Fund — singular — ran from December 2019 to March 2022 and is closed. Advice, thresholds and application steps written for that scheme do not apply here. Everything on this page relates to the current First Homes Fund.
Who can apply
- First-time buyer — You must never have owned a home anywhere in the world, on your own or jointly. On a joint application at least one applicant must be a first-time buyer, and any applicant who does own a property must have sold it before the purchase completes.
- A repayment mortgage of at least 25% — You need a capital repayment mortgage covering at least 25% of the purchase price, or the valuation if that is lower. Interest-only will not satisfy this.
- Your own deposit as well — The award is not a substitute for a deposit. You are expected to contribute around 5% of the price yourself. A Help to Buy ISA or Lifetime ISA can be used for that.
- Your main and only home — The property must be bought as your main and only home in Scotland. Buy to let, second homes and cash-only purchases are excluded, as are part-exchange purchases.
- Affordability within 45% — You are asked to evidence that your mortgage and debt repayments will not exceed 45% of your net income, using three months of payslips or an SA302 if you are self-employed.
- A property in reasonable condition — The home must meet the Tolerable Standard, which is checked through the Home Report.
- No competing application — You cannot have an open application to another Scottish Government shared equity scheme at the same time. One must be withdrawn first.
The application, the fee and the deadlines
The order matters, and it catches people out. You apply online after your offer has been accepted and after you have a mortgage decision in principle, but before your solicitor concludes missives. Applying too early or too late both cause problems.
There is a £650 application fee. It is refundable if the sale does not complete, unless the application contained false information. Budget for it alongside your deposit, legal fees and any LBTT, because it is a real cash cost at a point when money is usually tight.
Once you are approved you have three months to conclude missives and then six months from that point to complete. Missing the three-month deadline cancels the approval and you would have to apply again. In a Scottish purchase where a chain or a survey issue can absorb weeks, those dates are worth writing down.
The scheme is administered by Link Housing on behalf of the Scottish Government. Your solicitor handles the legal side, and the funding is passed to them alongside your mortgage advance to complete the purchase.
How the equity stake works
This is not a loan and there is no interest. The Scottish Government holds a percentage share of the property, and when you sell you repay that same percentage of the sale price. If the property has risen in value you repay more in cash terms than you received; if it has fallen you repay less. The percentage, not the pound figure, is what is fixed.
For the First Homes Fund the percentage is calculated on the property valuation rather than the price you actually paid, which matters if you have paid over the valuation to secure a property in a competitive area.
A worked example, clearly labelled
This is an illustration to show the mechanics, not a quotation and not a prediction of what any lender or the scheme would agree.
- The assumptions — A £200,000 purchase at valuation, a £10,000 First Homes Fund award, and a £10,000 deposit of your own.
- The equity share — £10,000 of £200,000 is 5%, so the Scottish Government would hold a 5% share.
- The mortgage — You would need a repayment mortgage of £180,000 — comfortably above the 25% minimum.
- On a later sale at £230,000 — You would repay 5% of £230,000, which is £11,500, not the original £10,000.
- On a later sale at £180,000 — You would repay 5% of £180,000, which is £9,000.
The point of the example is that the share moves with the market in both directions. Whether that trade is worth making depends on what the alternative deposit position looks like, which is the part worth talking through before you apply.
First Homes Fund or LIFT: which applies to you
They are separate schemes with separate rules, and you cannot hold an open application to both. In broad terms the First Homes Fund is a fixed contribution of up to £10,000 aimed squarely at first-time buyers, while the LIFT Open Market Shared Equity scheme takes a much larger share — between 10% and 40% — and prioritises particular groups including social renters, disabled people, people aged 60 and over, and members and veterans of the armed forces.
If you need a modest amount of help to reach a workable deposit, the First Homes Fund is usually the simpler route. If the gap between what you can borrow and what homes cost in your area is much wider than £10,000, LIFT is the scheme to look at.
Where a mortgage adviser fits
We are not the scheme administrator and we cannot approve or decline a First Homes Fund application — that decision sits with Link Housing and the Scottish Government. What we do is the mortgage side: working out what you can borrow on a repayment basis, checking that the 25% minimum and the affordability evidence will hold up, and finding a lender that will lend on a property with a Scottish Government equity stake registered against it. Not every lender will, and that is the practical constraint most people are not expecting.
Getting the mortgage decision in principle in place before you apply is the sequence the scheme expects, so it is worth starting the mortgage conversation early rather than after your offer is accepted.