# Scotland’s first homes fund: Could it help you buy?

Posted 8/10/2026 by [Alicia Robson](/blog/authors/alicia-robson)

Scotland’s First Homes Fund could provide up to £10,000 towards your first home. Discover how shared equity works, who can apply and what to consider.

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Buying your first home can be exciting, but saving a deposit and finding an affordable mortgage may make taking that first step challenging.

Scotland’s First Homes Fund could provide some additional support. The Scottish Government shared-equity scheme offers eligible first-time buyers up to £10,000 towards a new-build or existing property in Scotland.

The money is not a grant, and the scheme will not be right for everyone. In return for its contribution, the Scottish Government takes a percentage equity stake in your home.

Here is what you need to know before deciding whether the First Homes Fund could help you buy.

## What is the First Homes Fund?

The First Homes Fund is a Scottish Government shared-equity scheme for first-time buyers purchasing a home in Scotland.

It can contribute up to £10,000 towards a property with a value of no more than £300,000.

You will be the owner of the property and responsible for its mortgage, insurance, maintenance and running costs. However, the Scottish Government will hold a percentage equity stake based on its contribution.

There are no monthly payments or interest charged on the government’s contribution. Instead, the value of its stake can rise or fall with the value of your home.

This is the new **First Homes Fund**, which opened for applications in June 2026. It should not be confused with the previous **First Home Fund**, which closed in 2022.

## How does shared equity work?

The Scottish Government’s equity stake is calculated using its contribution as a percentage of the property’s valuation or purchase price, whichever is lower.

For example, imagine you buy a home valued at £200,000 and receive the maximum £10,000 contribution.

The Scottish Government’s equity stake would be 5%:

- Property value: £200,000
- Government contribution: £10,000
- Government equity stake: 5%
- Your equity share: 95%

If you later sold the property for £240,000 while the Scottish Government still held its 5% stake, £12,000 would normally be due to the government.

If the property decreased in value, the amount due would usually decrease too.

This means the amount eventually repaid is not necessarily limited to the original contribution.

## Who can apply?

The scheme is open to first-time buyers purchasing a property in Scotland with a mortgage.

For the purposes of the fund, a first-time buyer is generally somebody who does not own and has not previously owned a residential property in Scotland, elsewhere in the UK or anywhere else in the world.

Joint applications are permitted. If you are buying with somebody else, at least one applicant must be a first-time buyer. However, none of the applicants can still own another property when the supported purchase completes.

Only one First Homes Fund award is available per property. Two eligible first-time buyers purchasing together cannot each claim £10,000.

The property must be the applicants’ only home. The scheme cannot be used to purchase a buy-to-let property.

## What properties are eligible?

The scheme can be used for both existing and new-build homes in Scotland.

There are no restrictions on the property’s:

- Location within Scotland
- Age
- Size
- Type

However, the property must have a value of no more than £300,000.

For an existing home, its value will normally be shown in the Home Report. For a new-build property, a valuation may be included in the mortgage offer or provided separately to the lender.

You can offer more than the property’s valuation, but any amount above the valuation must be funded from your own money.

Paying above the valuation can increase the amount of cash you need and may create a greater risk of negative equity. Discuss the implications with your solicitor and mortgage adviser before committing to an offer.

## Do you still need a deposit and mortgage?

Yes. The First Homes Fund is intended to contribute towards the purchase rather than replace your mortgage or deposit.

You must take out a capital-repayment mortgage covering at least 25% of the property’s purchase price. Interest-only mortgages are not eligible.

You may also need a deposit of around 5%, although the amount will depend on the requirements of your mortgage lender and your individual circumstances.

Not every lender offers mortgages through the scheme. Speaking to an independent financial adviser or mortgage adviser early can help you understand:

- Whether you may be eligible
- Which participating lenders could consider your application
- How much you may be able to borrow
- What deposit you might need
- Whether the repayments appear affordable
- Whether another home-buying scheme may be more suitable

A mortgage decision in principle will be required when you apply to the fund.

## Is there an affordability assessment?

As part of the application, the administering agent will carry out an affordability or sustainability check.

You will need to provide evidence that your proposed mortgage payments will not exceed 45% of your net income. The full assessment will also consider relevant financial information and debt repayments.

Passing the scheme’s assessment does not guarantee that a lender will approve your mortgage. Your chosen lender will carry out its own affordability checks and make a separate lending decision.

## Can you combine it with other schemes?

The First Homes Fund cannot normally be combined with another government scheme that helps you purchase a home, such as another Scottish Government shared-equity scheme.

However, you can use money from a Lifetime ISA or Help to Buy ISA towards your deposit, subject to the applicable account rules.

As different schemes work in different ways, seek advice before deciding which option is most suitable for you.

## When should you apply?

Timing is important.

You must have an offer accepted on a property before applying to the First Homes Fund. A verbal acceptance is sufficient; you do not need to wait for written confirmation.

However, you must apply before missives have been concluded and a moving-in date has been agreed.

In Scotland, concluded missives create a binding contract between the buyer and seller. Tell your solicitor at the earliest opportunity if you intend to use the First Homes Fund so the application can be coordinated with the legal process.

Do not assume that funding is guaranteed simply because your offer has been accepted.

## What will you need for the application?

The First Homes Fund application is made through Link Housing, the scheme’s administering agent.

You will need to provide:

- Details of your solicitor
- A mortgage decision in principle
- Evidence relating to the affordability assessment
- A copy of the Home Report for an existing property
- A reservation agreement for a new-build home

If your application is successful, you will receive an award letter valid for three months. You must agree your moving date within that period or the award will expire and you will need to reapply.

A successful applicant must also pay a £650 administration fee.

Remember to budget for the other costs of purchasing a home, which could include:

- Your deposit
- Solicitor’s fees
- Registration fees
- Land and Buildings Transaction Tax, if payable
- Mortgage fees
- Removal costs
- Buildings and contents insurance
- Repairs, furniture and initial running costs

Receiving assistance through the fund does not remove these additional costs.

## What happens after you buy?

You will be responsible for the property’s mortgage, insurance, repairs, maintenance, Council Tax and household bills.

The home is expected to be your only residence. You cannot normally rent or sublet a home purchased through the First Homes Fund.

You can choose to increase your equity share later, sometimes referred to as “staircasing”. Each increase must normally be at least 5%.

The amount you pay will be based on the property’s value at that time. You will need a current valuation and will be responsible for the associated costs.

If you already own 90% or more of the property, any further increase must take your ownership to 100%. Once you have purchased the government’s remaining stake, it will no longer be entitled to a share when you sell.

## What happens when you sell?

You must contact the scheme’s administering agent before putting the property on the market.

When the property is sold, the Scottish Government will normally receive the same percentage of the sale price or current value as its remaining equity stake.

For example, if it owns 5% and the property sells for £220,000, its share would normally be £11,000.

You will be responsible for the costs of selling the property. These costs are not deducted before the government’s percentage is calculated.

You will also need the Scottish Government’s agreement if you intend to sell for less than 95% of the property’s current value.

## Could the First Homes Fund help you?

The scheme could be worth exploring if:

- You are buying your first home in Scotland
- Your chosen property is valued at £300,000 or less
- You need some additional help towards the purchase
- You can obtain an eligible repayment mortgage
- You are comfortable with the Scottish Government retaining an equity stake
- You plan to use the property as your only home

However, shared equity has long-term implications. If your home rises in value, the amount due to the Scottish Government can rise too.

Before applying, make sure you understand:

- The percentage stake the government will hold
- What happens when you sell
- How you can increase your equity share
- The restrictions on renting the property
- The fees and other buying costs
- How the arrangement may affect future decisions

An independent financial adviser, mortgage adviser and solicitor can help you understand how these points apply to your circumstances.

## Ready to search for your first home?

Your Move has homes for sale across Scotland, and our local teams can help you arrange viewings and understand the buying process.

Our mortgage partners at Embrace Financial Services can also discuss your circumstances, explain the available mortgage options and help you obtain a mortgage decision in principle.

**Search properties for sale in Scotland or book an appointment with a mortgage adviser to take your next step.**

*Scheme information and eligibility criteria can change. Check the current Scottish Government guidance before applying. This article is a general guide and does not constitute legal, tax or financial advice.*

**Your property may be repossessed if you do not keep up repayments on your mortgage.**

*Your Move is an introducer to Embrace Financial Services Ltd. Embrace Financial Services Ltd is an Appointed Representative of PRIMIS Mortgage Network, a trading name of First Complete Ltd, which is authorised and regulated by the Financial Conduct Authority.*

*Your initial mortgage appointment is without obligation. Embrace Financial Services normally charges a fee, payable only when a mortgage application is submitted. The fee depends on your circumstances; the standard fee is £599 and complex cases may cost more. The fee will be discussed and agreed before an application is submitted.*

   ![Alicia Robson](https://www.your-move.co.uk/uploads/blog_author/12_24_t.jpg?v=35479) [Alicia Robson](/blog/authors/alicia-robson)

Your Move Emarketing Executive