Buying a home with the scheme

1. The lender decides on the loan

   How much can be borrowed is between the borrower and the Home Loan Provider. Eligibility for DHOAS is not approval of a loan, and the lender need not lend any particular amount whatever the subsidy tier.

2. The loan is drawn down

   The lender then reports the loan balance to DVA so the subsidy can be worked out.

3. The Subsidy Authorisation Request Form goes to DVA

   It confirms you are meeting the conditions, including occupancy, and nothing is paid until it is lodged. The scheme suggests sending it soon after settlement, once the date you move in is known, and to DVA, not the lender.

4. The first payment comes after settlement

   Each payment lands on the month’s first business day and is for the previous month. DVA processes them on the tenth-last business day of the month, so a month counts only if the loan was drawn down and every requirement met before that day. The scheme warns that the first payment will not arrive at settlement or when the first loan repayment falls due.

A DHOAS loan must be secured over the subsidised property, and it can be used only to buy a home or land, build a home, renovate or extend one, or refinance a loan taken for one of those purposes. It cannot pay for an investment property, a car, a boat or a holiday, which is why DHOAS loans come without lines of credit.

• The loan type: principal and interest, or interest-only for construction.
• No trusts: no subsidy is paid where any share of the land is held as trustee of a trust or as one of its beneficiaries.
• Refinancing an existing home: the DHOAS loan can cover only what is still owed, plus any new borrowing for an allowed purpose. Borrowing more to raise the subsidy, then paying the extra back in, is not allowed, and the borrower pays any transfer costs.
• Renovations: a DHOAS refinance can pay out a lender’s loan that funded renovations, but not repay savings, family or a credit card used for them.
• Redraw: if extra repayments ever take the loan to a nil or credit balance, the subsidy stops, even if the money is redrawn straight away.

The member must hold at least half the property, alone or with their partner, and be on the title. Sharing the loan changes the sums, as the scheme’s own examples show.

If a couple on a joint DHOAS loan separate, they have two years from the separation to settle their affairs without changes to the subsidy. Refinancing to take one partner off the loan stops the subsidy and needs a new certificate, and a loan still shared after the two years is subsidised on half its original balance. The scheme asks to be told of a separation as soon as possible, to avoid an overpayment.

The subsidy is also not paid on a property used mainly for a business, trade or profession, whoever runs it, partner, children, boarders and tenants included. The scheme counts a small home office or piano lessons two afternoons a week as minor, and a veterinary practice or a bed and breakfast with several bedrooms as the kind of use that can stop the payments.

The scheme calls occupancy its main condition: the member, their family, or both, must live in the subsidised home for at least 12 months, and the member must be living there and hold a valid certificate before payments can start. A dependant living in the home can meet the rule while the member is away.

• Refinancing an existing home into DHOAS starts the 12 months again, however long you have already lived there.
• A home you lived in before but have since left must be lived in again before payments start, and then for 12 months.
• Moving out before the 12 months are up has to be reported to DVA, which cancels the DHOAS payments into the loan; payments received after moving out must be repaid.
• After 12 months, the subsidy continues whether or not you live there, and the home can be rented out; the scheme recommends independent tax advice before doing so.

Postings have their own rules, including an exemption that has to be asked for before moving out. They sit with Defence housing in the guide to housing assistance while serving.

When the home is being built

From the first subsidy payment on a construction loan there are two years to finish building and move in, and then the 12 months of living there apply. Payments can start after the first drawdown, with a Change of Circumstances form after each further drawdown to raise them, or be put off until the loan is fully drawn. The total period of subsidy is the same either way, but starting early spends some of it on a smaller balance.

Up to 48 months of service credit can be turned into a one-off payment into the loan, always worked out at the tier 1 maximum, even for someone on a higher tier. As of September 2026 the largest lump sum is $27,984, which is 48 months at $583. It is asked for on the certificate application and paid with the first monthly payment.

To get it, a member has to be able to agree with both of the scheme’s statements, which in plain words are:

• while in the ADF, they have not bought, alone or with a partner, half or more of land in Australia with a house that was or could have been lived in as a home; and
• they expect to keep serving effectively for at least 12 months after the subsidy is authorised.

Refinancing a loan used to buy a home during service, having bought an investment property during service, buying before the certificate was issued, or having had a Defence home loan subsidy before are among the scheme’s examples of what rules it out. Not qualifying costs no service credit. The scheme suggests keeping at least two months of credit after the lump sum for a Permanent member, and a Reservist may want to keep 12 months or more, because payments stop when credit runs out.

The scheme lists the events that end the current subsidy arrangement. Restarting means a new application, assessed under the rules at that time, and a fresh 12 months of living in the home.

• Closing the loan to take out another DHOAS loan, or repaying it.
• Increasing the loan, or refinancing it to renovate, extend or do other work on the home.
• Moving the subsidy to another DHOAS loan while keeping the current one open.
• No longer meeting the scheme’s conditions, or using up the service credit.

Any overpayment has to be repaid in full, even if the loan has since closed, and the scheme says there is no exemption from repaying it. An amount not paid within 14 days of DHOAS’s notice attracts interest, worked out daily at the ATO’s general interest charge rate. The scheme lists the possible results of not keeping to the conditions as ending the payments, repaying them, being barred from the scheme, and disciplinary action or criminal prosecution. The scheme’s advice before any change to a subsidised loan is to talk to DHOAS first. How the subsidy amount itself is worked out is in the guide to what DHOAS is.