The First Home Fund in Scotland

The First Home Fund was a Scottish Government shared equity scheme that helped first-time buyers with a contribution towards a home. It ran from December 2019 until March 2022 and is now closed¹. It was a £200 million pilot scheme, and it had to stop taking new applications on 2 October 2020 because its budget was fully committed, before closing for good in March 2022².

The name did not disappear. In June 2026 the Scottish Government introduced the First Homes Fund, a new scheme for first-time buyers in Scotland that offers up to £10,000 towards the cost of a property worth up to £300,000³. This page explains both: what happened to the original First Home Fund, and how the First Homes Fund works today, including who can apply, what it costs, how the government's share is repaid, and where the scheme's help stops.

The original First Home Fund has closed, and the First Homes Fund replaced it

The First Home Fund opened in December 2019 as a pilot shared equity scheme with £200 million of Scottish Government funding². It was popular: there were 9,729 sales through the scheme as of 1 December 2020, equivalent to 9.6% of all residential property sales in Scotland over that period, and its applications were equivalent to nearly one-third (30%) of all new mortgages advanced to first-time buyers across Scotland in 2019-20⁷.

Demand used up the budget faster than planned. The scheme temporarily closed to new applications on 2 October 2020 because the budget was fully committed⁷, and the Scottish Government confirms the First Home Fund ran from December 2019 until March 2022 and is now closed¹. No new applications have been accepted since.

If you bought through the original First Home Fund, your shared equity agreement still stands. The Scottish Government's share in the property is normally repaid when the property is sold, and buyers have the option of increasing their share beforehand, with some conditions⁸. The rest of this page explains those rules, which work in much the same way under the new scheme.

The replacement scheme, launched in June 2026, is the First Homes Fund³. It keeps the same shared equity principle: the government contributes money towards the purchase and, in return, owns a share of the home.

First Homes Fund: up to £10,000 towards your first home

The First Homes Fund is a Scottish Government scheme that helps first-time buyers in Scotland buy a home³. You can get up to £10,000 towards the cost of a property worth up to £300,000³. The Scottish Government describes it as a £10,000 contribution for first-time buyers who struggle to save enough for a full deposit³.

The contribution is not a gift and not a loan with monthly payments. It is an equity stake: the government puts in money and owns a share of the home in proportion to what it contributed⁹. If you buy a property for £100,000 and get £10,000 from the fund, the Scottish Government will own 10% of it⁴.

Joint applications are allowed, but there is only one award. Joint applications receive one award of up to £10,000, and there is a limit of one application per property¹⁰. So buying with a partner does not double the help.

The original First Home Fund worked on the same basis but with a larger maximum. Under the pilot scheme the Scottish Government provided an interest-free equity loan worth up to £25,000⁷, and its equity stake could not exceed 49% of the property value or purchase price, whichever was lower¹¹. The new fund's £10,000 limit means the government's starting share is smaller, typically around 10% of a £100,000 purchase.

Who can apply, and who is excluded

The First Homes Fund is open to all first-time buyers in Scotland¹⁰. The definition used by the original scheme gives a sense of what counts: a first-time buyer was someone who does not own, nor has previously owned, a dwelling in Scotland or anywhere else in the world⁸.

The fund cannot be used for buy-to-let properties, and the home must be the sole residence of all applicants¹⁰. Cash buyers are excluded in practice because the scheme requires a mortgage: you need a mortgage on the property to make sure the Scottish Government's share is protected⁴.

There are no restrictions on the age or location of the property¹⁰, which was one of the features buyers valued in the original scheme. Evaluation interviews contrasted the flexibility of the First Home Fund with the Help to Buy scheme, which was limited to the purchase of newly built homes¹².

Property and mortgage rules for homes up to £300,000

You can use the fund to purchase a property with a home report value of up to £300,000¹⁰. Both new build and existing homes qualify¹⁰.

The mortgage rules are specific:

• Your mortgage must cover at least 25% of the purchase price of your property¹⁰.
• The mortgage must be capital repayment, not interest-only¹⁰.
• You may also need a deposit, usually around 5% of the purchase price¹⁰.
• You must show evidence that your mortgage payments will not be more than 45% of your net income⁶.

The mortgage lenders currently offering mortgages through the First Homes Fund are Bank of Scotland, Ecology Building Society, Glasgow Credit Union, Halifax, Leeds Building Society, Lloyds Bank, Nationwide, NatWest, Scottish Building Society, Scotwest Credit Union and Skipton Building Society¹⁰. Under the original scheme there were twelve participating lenders⁸. One of these lenders, Ecology Building Society, states that its First Homes mortgage requires a capital repayment mortgage covering at least 25% of the purchase price or valuation if lower, and that no additional deposit is required from your own funds on properties it values up to £200,000¹³. Skipton describes the scheme as requiring a deposit of at least 5% and a home costing no more than £300,000¹⁴.

The original scheme's statistics show what buyers actually purchased. The average price of a property bought through the First Home Fund was £147,600, higher than the average first-time buyer price across Scotland¹⁵. About 17% of properties purchased through the scheme were new builds¹⁵, and 63% of those new builds had a price above £200,000, which was the price cap for Help to Buy (Scotland) at the time⁷. Nearly four in ten buyers (39.0%) purchased a property at a price above valuation, paying on average 4.2% above it¹⁵.

The Scottish Government owns a share of your home

The money comes from the Scottish Government, which means it will own a share of your home⁴. The share is based on how much the government contributes: if you buy for £100,000 and receive £10,000, the government owns 10%⁴.

Under the original scheme, the equity share was calculated as the equity loan amount divided by the lower of the property's value or its price⁷. The same principle applies: the government's stake is a percentage, not a fixed debt.

Ownership itself stays with you. You will still own the property and have complete title and deeds to your home⁴. As Skipton puts it, you own 100% of the property, but the government holds a financial stake, an equity share¹⁴. You are responsible for all the ordinary costs of ownership: your mortgage, buildings insurance, home contents insurance, repairs and maintenance, Council Tax, heating, lighting and water bills, fittings and furniture⁴.

There is no rent and no interest on the government's stake. Unlike shared ownership schemes, there is no rent payable on the Scottish Government's equity stake¹³, and there are no monthly payments or interest payments to the Scottish Government⁷. You will only make your normal mortgage payments to your lender¹³. This is the main practical difference from shared ownership, where you pay rent on the share you do not own.

Fees and costs you pay yourself

The government's contribution covers part of the purchase price, but everything else is yours to pay. When you apply, you will also have to pay a fee of £650⁶. Beyond that, you'll need to pay for your share of the property's price, legal costs to your solicitor, and registration fees⁶.

Some lenders reduce the upfront cost. Ecology Building Society states that its First Homes mortgage includes a free standard property valuation¹³. Other costs, such as a home report on an open market purchase, are arranged separately.

The original scheme's evaluation gives a picture of what buyers brought to the table. The mean First Home Fund buyer's deposit contribution was £14,400, half the average first-time buyer deposit across Scotland¹⁵. The average gross annual household income of scheme buyers was £40,900, similar to the £40,800 average for all first-time buyers in Scotland in 2019-20¹⁵. The average age of scheme buyers was 30.4, against 31.0 for all Scottish first-time buyers¹⁵.

Where buyers came from also shows who the scheme reached. Approximately half (50.4%) of buyers were previously living in rented accommodation, and just under half (46.0%) were living with parents or relatives¹⁵. A small share (2.1%) were living in a property they owned outright or were paying a mortgage on, and 1.5% were living with friends¹⁵. Some buyers (5%) had previously owned property¹⁵.

How to apply, and the award letter deadlines

The Scottish Government publishes a guidance for buyers document that gives eligibility information and step-by-step instructions on how to apply³. Applications are made through the mygov.scot process, and you will need⁶:

1. details of your solicitor
2. a mortgage decision in principle
3. evidence that your mortgage payments will not be more than 45% of your net income
4. a copy of the home report for open market sales, or a reservation agreement for new build homes

If your application is approved, you will get an award letter which is valid for 3 months⁶. You'll need to agree your move-in date within this time or your letter will no longer be valid and you'll need to reapply for the First Homes Fund⁶. Ecology Building Society describes the same deadlines from the lender's side: once approved, you have up to 6 months to complete your property purchase, and the £650 application fee is payable¹³.

The award letter is not the same as a mortgage offer. Your lender still has to agree to lend to you, and the purchase still has to conclude through the normal Scottish conveyancing process. The fund's deadlines sit alongside those, not instead of them.

Living in the home: no renting or subletting

Your home is expected to be your only residence⁵. The Scottish Government does not allow you to rent or sublet a home purchased through the First Homes Fund⁵. This is a firm rule, not a general expectation: the fund cannot be used for buy-to-let properties and must be the sole residence of all applicants¹⁰.

The rule matters if your circumstances change. If you need to move for work, or want to keep the home and live elsewhere, you cannot let it out in the meantime. The equivalent rule under Help to Buy (Scotland) was the same in spirit: the home was expected to be the buyer's sole residence, and the Scottish Government would not allow any form of subletting as a general rule¹⁶.

If you can no longer afford the mortgage, the options are different from renting the property out. The Scottish Government runs the Home Owners' Support Fund, which includes schemes where the government takes a financial stake in your home to reduce monthly payments to your lender¹⁷. Free, impartial money advice is available through MoneyHelper and debt advice charities before things reach that stage.

Increasing your share: at least 5% each time

You can buy the Scottish Government out of its share before you sell, a process called staircasing. You must increase your share by at least 5% each time⁵. Once you own 90% or more of the property, you can only increase your share up to 100%⁵.

You'll need to get a home report valuation if you decide to increase your share⁵. The price you pay for each extra slice is based on the home's current value, not the original purchase price, so as the home's value rises each 5% step costs more.

If you increase your share to 100%, the Scottish Government will no longer have a share in your home and will not be due any money when you sell it⁵. The same rule applied under Help to Buy (Scotland), where you could increase your share all the way up to 100%¹⁶. The guide to staircasing and the page on staircasing fees explain how the costs work in the related shared ownership schemes.

Selling your home and repaying the government's share

The Scottish Government's share is repaid when the property is sold⁸. The amount of money due will depend on two things: what price your home is sold for, and the government's share in your home⁵. Because the stake is a percentage, the government shares in any rise or fall in the home's value.

The official examples show how it works. If the Scottish Government has a 20% share in your home and you sell it for £140,000, they'll get £28,000 from the sale, and you'll get the remaining £112,000⁵. If the government has a 10% share and you sell for £95,000, they'll get £9,500 and you'll get the remaining £85,500⁵.

There is a procedure to follow. You must contact the fund's administering agent, Link Housing, before putting your property on the market⁵. You need the Scottish Government's agreement to sell your home for less than 95% of the current value⁵. All selling costs are your responsibility, and your solicitor will confirm what these are; these costs are not taken from the sale proceeds⁵.

There is no fixed deadline to repay the equity loan¹³. The share is repaid on sale, or earlier if you staircase to 100%. The same open-market shared equity principle applies across the Scottish schemes: if you ever choose to sell the home, the Scottish Government will get a share of the money¹⁸, and you are required to repay the equity stake to Scottish Ministers upon the occurrence of certain events set out in your shared equity agreement, the most common being when you sell your home¹⁹.

Using a Lifetime ISA or Help to Buy ISA for the deposit

The First Homes Fund cannot be used together with other schemes that help you buy a home, but a Help to Buy ISA or Lifetime ISA can be used for the deposit¹⁰. This matters because the fund's £10,000 contribution does not cover everything: you still need a mortgage of at least 25% of the purchase price and usually a deposit of around 5%¹⁰.

Lifetime ISA rules set their own conditions. The full balance, including the government bonus, can be withdrawn without charge to buy a first home worth up to £450,000, at any time from 12 months after opening the account²⁰, and the property must cost £450,000 or less and be bought with a mortgage²¹. If the person you're buying with has a Lifetime ISA, you can both use your savings and government bonus, provided you are both first-time buyers and meet the conditions²¹. If you hold both a Help to Buy ISA and a Lifetime ISA, you can only use the government bonus from one of them to buy your first home²¹.

The comparison page on a Lifetime ISA or Help to Buy ISA explains the differences between the two savings routes, and the guide to how much deposit you need covers what lenders look for.

Where the scheme's help stops

The First Homes Fund reduces the deposit hurdle, but it does not remove the other costs or risks of buying. You pay the £650 fee, your legal and registration costs, and your share of the purchase price⁶. You carry all the running costs of the home⁴. If the home falls in value, your share falls with it, though the government's share falls too, which cushions the loss.

The scheme also does not suit every buyer. It is a scheme for first-time buyers¹⁰, it requires a mortgage rather than a cash purchase⁴, and it cannot be used for buy-to-let properties¹⁰. It cannot be combined with other Scottish Government shared equity schemes⁸. And because the government's share is repaid as a percentage of the sale price, you give up part of any future increase in value in return for the help now.

Other routes exist. The Scottish Government's other shared equity schemes, Open Market Shared Equity and New Supply Shared Equity, work on a similar principle but target first-time buyers on lower incomes²². Help to Buy (Scotland) has closed to new applications, and the First Homes scheme in England is a different scheme for a different country. The overview of first-time buyer schemes sets out what is available in each nation, and the guide to buying a home in Scotland covers the purchase process itself.