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REQUEST FOR PROPOSAL

REQUEST FOR PROPOSAL FOR THE ESTABLISHMENT OF A PANEL OF LENDERS


TO ADMINISTER THE FIRST HOME LOAN DEPOSIT SCHEME (FHLDS)

Submission Closing Times:

Major Bank Lenders – Submissions must be lodged before 11:59pm on


Wednesday 6 November 2019

Non-Major Bank Lenders – Submissions must be lodged before 11:59pm on


Friday 15 November 2019
CONTENTS

1. Introduction 1
1.1. Context 1
1.2. Approach to market and establishment of the Panel 1
1.3. Panel arrangements 2
1.4. Panel size 3
1.5. Key terms 3
1.6. Governing law 4

2. Obtaining RFP documentation 5


2.1. RFP available on NHFIC website 5

3. Lodging Tenders 5
3.1. Electronic lodgement 5
3.2. Preparing to lodge a Submission 5

4. Additional information and variations to the RFP documentation 5


4.1. Industry briefing 5
4.2. Requests for Additional Information 6
4.3. Errors & alterations 6

5. Information management 6
5.1. NHFIC’s confidential information 6
5.2. Respondent’s confidential information 7
5.3. Use of Submission documents 7

6. Policy and law 7


6.1. Ethical dealing 7
6.2. Conflicts of interest 8
6.3. Application of law and Commonwealth policy 9

7. Matters concerning Submission response 9


7.1. Submission response requirements 9
7.2. Respondents to inform themselves 10
7.3. Disclaimer 11
7.4. Offers and acceptance of offer 12
7.5. Complaints 12

8. General matters 12
8.1. Prices and units 12
8.2. Joint or Part Submissions 12

9. Evaluation of Tenders 12
9.1. Evaluation process 12

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9.2. Security, probity and other checks 13
9.3. Minimum Content and Format Requirements 13
9.4. Conditions for participation 13
9.5. Clarification, short-listing and negotiations 14

10. Other Matters 14


10.1. Public Statements 14
10.2. Additional Rights of the NHFIC 14
10.3. Finalisation of Participating Lender Deeds 15
10.4. Publication of contract award 15
10.5. Debriefing 15

SCHEDULE 1 STATEMENT OF REQUIREMENT 16

SCHEDULE 2 RESPONSE FORMS 19

SCHEDULE 3 DRAFT PARTICIPATING LENDER DEED AND SCHEME RULES 31

SCHEDULE 4 DEED OF GUARANTEE 95

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REQUEST FOR PROPOSAL
REQUEST FOR PROPOSAL FOR THE ESTABLISHMENT OF A PANEL OF LENDERS
TO ADMINISTER THE FIRST HOME LOAN DEPOSIT SCHEME (FHLDS)

1. Introduction

1.1. Context
1.1.1. The National Housing Finance and Investment Corporation (NHFIC) is
responsible for implementing the First Home Loan Deposit Scheme (Scheme),
an Australian Government initiative to assist eligible first home buyers access
the housing market more quickly.
1.1.2. The NHFIC is seeking to partner with lenders to administer the Scheme. To that
end, the NHFIC is proposing to establish a panel of Major Bank Lenders and
Non-Major Bank Lenders to participate in administering the Scheme.
1.1.3. Under the Scheme, the NHFIC will provide a guarantee in favour of participating
lenders that have funded eligible loans to eligible borrowers. Up to 10,000
Scheme backed loans nationally will be able to take the benefit of the Scheme
in each financial year.
1.1.4. A summary of the NHFIC and a detailed description of the Services to
administer the Scheme are set out in Schedule 1.
1.1.5. The implementation of the Scheme will be subject to directions from the
Australian Government as set out in the NHFIC’s Investment Mandate. An
updated draft of the Investment Mandate has been released by the
Commonwealth Department of the Treasury for public consultation and is
available here www.treasury.gov.au/consultation .

1.2. Approach to market and establishment of the Panel


1.2.1. The NHFIC invites proposals from Major Bank Lenders and Non-Major Bank
Lenders to be appointed to a panel (the Panel) for the provision of services in
administering the Scheme in accordance with this Request for Proposal (RFP).
1.2.2. The Panel will be divided into 2 sub-panels – one comprising of Major Bank
Lenders and the other comprising of Non-Major Bank Lenders.
1.2.3. For the purposes of this RFP:
a. a Major Bank Lender is:
• Australia and New Zealand Banking Group Limited (ACN 005 357
522) and any entity that is a related body corporate;
• Commonwealth Bank of Australia (ACN 123 123 124) and any entity
that is a related body corporate;
• National Australia Bank Limited (ACN 004 044 937) and any entity
that is a related body corporate; or

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• Westpac Banking Corporation (ACN 007 457 141) and any entity that
is a related body corporate;
Note: a related body corporate has the meaning given to that term in the
Corporations Act 2001 (Cth);
b. a Non-Major Bank Lender is a credit provider (as defined in the National
Credit Code) that:
• is not a Major Bank Lender; and
• holds an Australian credit licence under the National Consumer Credit
Protection Act 2009 (Cth) (NCCP Act) regulated by the Australian
Securities and Investments Commission (ASIC) or is exempt from the
requirement to hold such a licence under the NCCP Act.
1.2.4. At the commencement of the Scheme, the requirements for administering the
Scheme will be substantially the same for the Major Bank Lender sub-panel and
the Non-Major Bank Lender sub-panel however the allocation of guaranteed
places and the timeframes for responding to this RFP and implementing the
Scheme will differ as between the two sub-panels (refer to paragraphs 1.3, 1.4
and item 2.3 of Schedule 1 below).
1.2.5. For the purposes of this RFP, only one legal entity within each Major Bank
Lender group should submit a Submission responding to this RFP. In its
Submission a Major Bank Lender may identify any related bodies corporate or
divisions within its Major Bank Lender group that it wishes to nominate to
promote and administer the Scheme.
1.2.6. If a situation arises where two (or more) legal entities within a Major Bank
Lender group lodge Submissions in response to this RFP, the NHFIC may in its
absolute discretion:
a. exclude one (or more) of the tendered Submissions; or
b. assess both (or all) Submissions,
on the basis that only one of the Submissions may form the basis of any
resultant Participating Lender Deed should that Major Bank Lender be selected
by the NHFIC to be appointed to the Panel.
1.2.7. Respondents are advised that this RFP is not a covered procurement for the
purposes of the Commonwealth Procurement Rules and the Government
Procurement (Judicial Review) Act 2018 (Cth).

1.3. Panel arrangements


1.3.1. Successful Respondents will be appointed to the Panel on terms and conditions
substantially in the form of the draft Participating Lender Deed. As part of the
Scheme, the NHFIC will provide a guarantee to Panellists substantially in the
form of the Deed of Guarantee to allow eligible first home buyers to purchase
an eligible residential property with a deposit of between 5 and 20 per cent.

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1.3.2. The Scheme is expected to commence on 1 January 2020 (Commencement
Date) with the Panel having an initial term of 2 ½ years.
1.3.3. Respondents are advised that the NHFIC may, at any time during the
anticipated 2 ½ year term of the resulting Participating Lender Deed, undertake
a further approach to market to refresh the Panel (Panel Refresh).
1.3.4. Any Panel Refresh will be conducted in accordance with the arrangements
issued at that time, and may result in new lenders being added to the Panel
and/or the extension of existing Panellists’ appointment to the Panel.
1.3.5. Respondents should also note that the NHFIC does not intend to enter into any
significant negotiations on the draft Participating Lender Deed (including the
Scheme Rules). To the extent that the NHFIC does agree to any minor changes
to the terms and conditions outlined in the draft Participating Lender Deed, the
NHFIC may make identical, or substantially similar changes to any resultant
Participating Lender Deeds for all successful Respondents.

1.4. Panel size


1.4.1. As part of this RFP process, the NHFIC is planning to appoint up to 2 Major
Bank Lenders to the Panel to administer the Scheme from the Commencement
Date. To meet the anticipated requirements of the Investment Mandate, no
more than 2 Major Bank Lenders will participate on the Panel in any one
financial year.
1.4.2. Depending on the demonstrated capacity of Non-Major Bank Lenders to
administer the Scheme, as part of this RFP process the NHFIC may appoint
Non-Major Bank Lenders to the Panel to commence administering the Scheme
at any time between the Commencement Date and 1 March 2020.
1.4.3. The NHFIC does not intend to appoint all Respondents to the Panel and
reserves the right to determine the appropriate size and mix of Panellists.
1.4.4. Respondents who are not appointed to the Panel as part of this RFP process
may be invited to participate in any subsequent Panel Refresh.

1.5. Key terms


1.5.1. The following table sets out the details of key terms used in this RFP:

Closing Time For the Major Bank Lenders sub-panel:


11:59pm Sydney time on Wednesday 6 November 2019

For the Non-Major Bank Lenders sub-panel:


11:59pm Sydney time on Friday 15 November 2019

Contact Officer Email: lenders@fhlds.nhfic.gov.au

Deed of the document set out in in Schedule 4 to this RFP


Guarantee

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Deadline for For the Major Bank Lenders sub-panel:
Submission of 4pm Sydney time on Monday 4 November 2019
Respondents’
Questions
For the Non-Major Bank Lenders sub-panel:
4pm Sydney time on Tuesday 12 November 2019
Investment the National Housing Finance and Investment
Mandate Corporation Investment Mandate Direction 2018
(a direction made by the Treasurer under section 12(1) of
the National Housing Finance and Investment
Corporation Act 2018 (Cth)) of which an updated draft
has been released by the Commonwealth Department of
the Treasury for public consultation, available here
www.treasury.gov.au/consultation
NHFIC the National Housing Finance and Investment
Corporation
Offer Period means 180 days from the relevant Closing Time
Panel the panel of lenders established through this RFP
process to administer the Scheme
Panellists the lenders appointed by the NHFIC to the Panel through
this RFP process
Participating the document set out in draft terms in Schedule 3
Lender Deed
Respondent any entity which lodges a Submission or, where the
context requires, is proposing to lodge a Submission
Response the RFP Response Forms set out in Schedule 2
Forms
RFP this Request for Proposal
Scheme Rules means the rules applicable to Panellists for administering
the Scheme as in force from time to time
Services the services set out in Schedule 1
Submission any proposal submitted in response to this RFP.

1.6. Governing law


1.6.1. This RFP is to be construed in accordance with, and any matter related to it is
to be governed by, the law of New South Wales. The courts of that State have
non-exclusive jurisdiction to decide any matter related to this RFP.

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2. Obtaining RFP documentation

2.1. RFP available on NHFIC website


2.1.1. This RFP is available on the NHFIC’s website at https://www.nhfic.gov.au.
Respondents should regularly check the NHFIC website for any updates or
addenda to the RFP.

3. Lodging Tenders

3.1. Electronic lodgement


3.1.1. Submissions must be lodged electronically via the following address before the
relevant Closing Time:
lenders@fhlds.nhfic.gov.au
3.1.2. Respondents must allow sufficient time for their Submission to be lodged before
the relevant Closing Time.

3.2. Preparing to lodge a Submission


3.2.1. The NHFIC will accept Submissions lodged to the email address listed in
paragraph 3.1.1.
3.2.2. The NHFIC will accept attachments to Submissions in the format of Microsoft
Excel or PDF format.
3.2.3. The subject line of, and the file name(s) of any attachments to, a Submission
should:
a. incorporate the Respondent’s company name; and
b. reflect the various parts of the Submission they represent, where the
Submission comprises multiple emails (e.g. “…email 1 of 3”) and/or
attaches multiple files (e.g. “…attachment 1” etc).
3.2.4. Submission files should not exceed a combined file size of 5 megabytes per
email.
3.2.5. Submissions must be completely self-contained. No hyperlinked or other
material may be incorporated by reference.

4. Additional information and variations to the RFP documentation

4.1. Industry briefing


4.1.1. NHFIC will be conducting the following industry briefings concerning the RFP.
Details of the industry briefings are:
Industry briefing for Major Banks:
Wednesday 30 October 2019 or Thursday 31
October 2019
Level 10 Export House, 22 Pitt Street, Sydney

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Major Banks interested in participating in an industry briefing are requested to
email the Contact Officer to arrange a time on one of the above days.
Industry briefing for Non-Major Bank Lenders:
1-3pm Sydney time Wednesday 6 November
2019
Level 10 Export House, 22 Pitt Street, Sydney
4.1.2. Attendance at the industry briefing is optional, however Respondents are
encouraged to attend.
4.1.3. No more than 2 representatives from each Respondent should attend the
briefing. Respondents should provide written notice to the Contact Officer no
later than the day before the relevant industry briefing setting out the names
and contact details for all persons who will be attending the industry briefing.
Attendees who have not been notified to the Contact Officer by this time may be
refused entry to the industry briefing.

4.2. Requests for Additional Information


4.2.1. Requests for further information in relation to this RFP must be directed in
writing to the Contact Officer by the Deadline for Submission of Respondents’
Questions. Subject to paragraph 7.5, the only point of contact for all matters
relating to this RFP and the RFP process is the Contact Officer.
4.2.2. The NHFIC will determine what, if any, response should be given to a
Respondent’s question. The NHFIC may circulate Respondent questions and
the NHFIC’s responses to all other Respondents without disclosing the source
of the questions or revealing any confidential information of a Respondent.
4.2.3. If a Respondent believes it has found a discrepancy, error, ambiguity,
inconsistency or omission in this RFP or any other information given or made
available by the NHFIC, the Respondent should promptly notify the Contact
Officer.

4.3. Errors & alterations


4.3.1. If the NHFIC considers there are unintentional errors of form in a Submission,
the NHFIC may request the Respondent to correct or clarify the error, but will
not permit any material alteration or addition to the Submission.

5. Information management

5.1. NHFIC’s confidential information


5.1.1. Respondents must not, and must ensure that their employees, agents or
subcontractors do not record or communicate to any person any confidential
information concerning the affairs of the NHFIC, the Commonwealth or a third
party.
5.1.2. The NHFIC may exclude from further consideration any Submission lodged by a
Respondent who has engaged in any behaviour contrary to paragraph 5.1.1.

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5.2. Respondent’s confidential information
5.2.1. Subject to paragraphs 5.2.2 and 5.2.3, the NHFIC will treat as confidential all
Submissions received by the NHFIC in connection with this RFP.
5.2.2. The NHFIC will not be taken to have breached any obligation to keep
information provided by Respondents confidential to the extent that the
information:
a. is disclosed by the NHFIC to its advisers, officers, employees or
subcontractors solely in order to conduct the RFP process or to prepare
and manage any resultant Participating Lender Deed;
b. is disclosed to the NHFIC’s internal management personnel, solely to
enable effective management or auditing of the RFP process;
c. is disclosed by the NHFIC to the responsible Minister or in response to a
request by a House or a Committee of the Parliament of the
Commonwealth of Australia;
d. is shared by the NHFIC within the NHFIC’s organisation or with another
Commonwealth agency;
e. is authorised or required by law to be disclosed; or
f. is in the public domain otherwise than due to a breach of the relevant
obligations of confidentiality.
5.2.3. The NHFIC will only keep information contained in, or obtained or generated in
performing, any resultant Participating Lender Deed entered into with a
successful Respondent, including any information sourced from the successful
Respondent's Submission, confidential in accordance with the terms of the
Deed. Respondents should include in their Submissions any request for such
information to be treated as confidential following their entry into any resultant
Participating Lender Deed.

5.3. Use of Submission documents


5.3.1. All Submissions become the property of the NHFIC upon lodgement. Without
prejudice to anything agreed in any resultant Participating Lender Deed,
ownership of intellectual property in the information contained in a Submission
remains unchanged. However, the NHFIC may use any material contained in a
Submission, or otherwise provided by a Respondent, for the purposes of the
RFP process and the preparation and management of any resultant
Participating Lender Deed.

6. Policy and law

6.1. Ethical dealing


6.1.1. Respondents must not:

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a. prepare their Submission with the improper assistance of any current or
former NHFIC or Commonwealth officer or employee or the use of any
information improperly obtained or in breach of an obligation of
confidentiality;
b. engage in any collusive tendering, misleading or deceptive conduct, anti-
competitive conduct, or any other unlawful or unethical conduct with any
other Respondent or any other person in connection with the preparation of
their Submission or the RFP process;
c. attempt to solicit information from or influence improperly any current or
former officer, employee, contractor or agent of the NHFIC, or violate any
applicable laws or Commonwealth policies regarding the offering of
inducements in connection with the RFP process;
d. otherwise act in an unethical or improper manner or contrary to any law.
6.1.2. The NHFIC may exclude from consideration any Submission lodged by a
Respondent that has engaged in any behaviour contrary to paragraph 6.1.1.

6.2. Conflicts of interest


6.2.1. As part of their Submission, each Respondent should represent and declare in
Part B of Schedule 2 whether, at the time of lodging their Submission, a conflict
of interest concerning itself or a related entity exists, or might arise during the
term of the resultant Participating Lender Deed or in relation to their
Submission.
6.2.2. A conflict of interest means any matter, circumstance, interest, or activity
affecting the Respondent (including the officers, employees, agents and
subcontractors of the Respondent) which may or may appear to impair the
ability of the Respondent to perform the Services diligently and independently.
6.2.3. A conflict of interest may exist if:
a. Respondents or any of their personnel have a relationship (whether
professional, commercial or personal) with personnel of the NHFIC involved
in the evaluation of Submissions; or
b. Respondents have a relationship with, and obligations to, an organisation
which would affect the performance of the Services or would bring
disrepute to or embarrass the NHFIC.
6.2.4. If a conflict of interest arises, the NHFIC may:
a. exclude the Submission from further consideration;
b. enter into discussions to seek to resolve the conflict of interest; or
c. take any other action it considers appropriate.

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6.3. Application of law and Commonwealth policy
6.3.1. Respondents are considered to have familiarised themselves with all relevant
Commonwealth legislation and policies relating to the RFP process and the
provision of the Services including:
a. Division 137.1 of the Criminal Code which makes it an offence to knowingly
provide false or misleading information to a Commonwealth entity;
b. the Auditor-General Act 1997 (Cth) which allows the Auditor-General to
conduct a review or examination, at any time, of any aspect of the
operations of Australian Government agencies;
c. the Privacy Act 1988 (Cth) (Privacy Act) which aims to ensure that
contractors and their subcontractors do not engage in an act or practice
that would breach an Australian Privacy Principle under the Privacy Act if
done by the Commonwealth. The Privacy Act also imposes obligations
directly on contractors and subcontractors; and
d. the Work Health and Safety Act 2011 (Cth) which requires a person
conducting a business or undertaking to ensure the health and safety of all
workers.

7. Matters concerning Submission response

7.1. Submission response requirements


7.1.1. Respondents should address each of the evaluation criteria specified in the
table below by completing the Response Forms contained in Schedule 2.
Respondents may include additional information in their Submissions, however
the Respondent’s response to each of the Response Forms will form the basis
of the NHFIC’s evaluation of the Submission.

Item Evaluation criterion


1 The Respondent’s standards of customer care including treatment of
borrowers in financial hardship.
2 The competitiveness of loan products offered by the Respondent
including interest rates and other fees.
3 The quality of the Respondent’s loan origination process and
associated levels of financial risk to the Commonwealth and the
NHFIC.
4 The reputation of the Respondent.
5 The extent to which the Respondent, if admitted to the panel, would
promote competition in lending markets and related markets.

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Item Evaluation criterion
6 The capacity of the Respondent to implement and promote the
Scheme:
a. For Major Bank Lenders: from 1 January 2020
b. For Non-Major Bank Lenders: before 1 March 2020.

7 The extent to which the Respondent’s participation in the Scheme will


minimise calls on the Guarantee.
8 The extent of the Respondent’s contract compliance.

7.1.2. In evaluating Submissions and undertaking its overarching assessment, the


NHFIC may also take into account:
a. the risks presented by each Submission
b. the extent to which Respondents, when considered together, can undertake
credit activities across Australia (including through other entities providing
credit services); and
c. the extent to which the Respondent’s participation in the Scheme will assist
in achieving the Scheme’s policy objectives.

7.2. Respondents to inform themselves


7.2.1. Information in this RFP concerning current or past requirements, volumes,
location, environment or other relevant matters has been prepared from
information available to the NHFIC. Such information may be based on:
a. the updated version of the Investment Mandate which is currently out for
public consultation and is subject to change
b. the NHFIC’s current understanding of the requirements of the Australian
Prudential Regulation Authority (APRA) and the Government’s policy
objectives for the Scheme; and
c. projections from available historical information which may not be accurate
and may assume trends or events or other matters that may not be valid or
eventuate as and when expected or at all.
In addition, the provisions and other information provided in the Participating
Lender Deed, Scheme Rules and Deed of Guarantee are subject to change.
The NHFIC does not guarantee that this information will remain true at any
future point in time.
7.2.2. The NHFIC has no liability to any Respondent should any information or
material provided with respect to this RFP or the Services be inaccurate or
incomplete or if actual Scheme places, volumes, locations, environments or
other relevant matters vary from the NHFIC’s current expectations.
7.2.3. Respondents are considered to have:

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a. examined this RFP, including any variations or addenda to the RFP, any
documents referenced in this RFP and any other information made
available by the NHFIC to Respondents;
b. examined all further information obtainable by reasonable inquiries relevant
to the risks, contingencies, and other circumstances having an effect on
their Submissions;
c. satisfied themselves as to the correctness and sufficiency of their
Submissions;
d. made their own independent assessments of actual workload requirements
under any resultant Participating Lender Deed and any associated costs;
and
e. satisfied themselves as to the terms and conditions of the draft Participating
Lender Deed (including Scheme Rules) and Deed of Guarantee and their
ability to comply with the Participating Lender Deed and Scheme Rules,
subject to their responses to the Statement of Non-Compliance in Schedule
2.
7.2.4. In preparing their Submissions, Respondents must not rely on:
a. any representation, letter, document or arrangement, whether oral or in
writing, or other conduct as adding to or amending this RFP other than
amendments in accordance with paragraphs 2.1.1 and 4.3; or
b. any warranty or representation made by or on behalf of the Commonwealth
or the NHFIC, except as are expressly provided for in this RFP.
7.2.5. The NHFIC will not be responsible for any costs or expenses incurred by
Respondents in complying with the requirements of this RFP.

7.3. Disclaimer
7.3.1. This RFP is an invitation to treat and is not to be taken to be or relied upon as
an offer capable of acceptance by any person or as creating any form of
contractual (including a process contract), quasi contractual, restitutionary or
promissory estoppel rights, or rights based on similar legal or equitable
grounds, whether implied or otherwise.
7.3.2. The NHFIC is not liable to any Respondent on the basis of any contract or other
understanding (including any form of contractual, quasi contractual,
restitutionary or promissory estoppel rights, implied obligations or rights based
on similar legal or equitable grounds) whatsoever, or in negligence, as a
consequence of any matter relating or incidental to this RFP, the procurement
of any or all of the Services or a Respondent’s participation in this RFP process,
including instances where:
a. a Respondent is not appointed to the Panel;
b. a Respondent is not invited to participate in any subsequent process as
part of or following completion of this RFP process;

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c. the NHFIC varies, suspends or terminates the RFP process; or
d. the NHFIC exercises or fails to exercise any of its other rights under or in
relation to this RFP.

7.4. Offers and acceptance of offer


7.4.1. Lodging a Submission will constitute an offer by the Respondent to provide the
Services on the terms and conditions set out in the draft Participating Lender
Deed, subject to any exceptions noted in its Submission. A Submission will not
be taken to have been accepted until a Participating Lender Deed has been
executed by the Respondent and the NHFIC.

7.5. Complaints
7.5.1. Any complaints arising out of the RFP process should be directed to the NHFIC
Head of Legal in accordance with the NHFIC’s complaints mechanism.
Respondents should refer to the ‘Complaints Mechanism’ on the NHFIC website
for details of NHFIC’s complaints policy including how to lodge a complaint
(available here: https://www.nhfic.gov.au/media/1125/complaints-mechanism-
public-version.pdf).

8. General matters

8.1. Prices and units


8.1.1. Submissions must be written in English.
8.1.2. All measurements must be expressed in Australian legal units of measurement.

8.2. Joint or Part Submissions


8.2.1. NHFIC will not consider:
a. joint Submissions;
b. Submissions for only part of the Services;
c. a Submission from a Respondent that does not exist as a legal entity at the
relevant Closing Time; or
d. a Submission that does not otherwise meet the conditions for participation
specified in paragraph 9.4.

9. Evaluation of Tenders

9.1. Evaluation process


9.1.1. Following the relevant Closing time, Submissions will be evaluated to identify
the proposals that represent best value on the basis of the evaluation criteria.
9.1.2. In conducting the evaluation, the NHFIC may take into account information
provided by a Respondent in response to one evaluation criterion in its
evaluation of another evaluation criterion.

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9.1.3. The NHFIC may at any time exclude a Submission from consideration if the
NHFIC considers that the Submission is incomplete or clearly not competitive.
However, the NHFIC may consider such Submissions and seek clarification in
accordance with paragraph 9.5.

9.2. Security, probity and other checks


9.2.1. The NHFIC may perform such security, probity and financial investigations and
procedures as the NHFIC may determine are necessary in relation to
Respondents, their employees, officers or related entities. The NHFIC may also
make independent enquiries about any matters that may be relevant to the
evaluation of a Submission.

9.3. Minimum Content and Format Requirements


9.3.1. Subject to paragraph 4.3.1, the NHFIC will exclude a Submission from further
consideration if the NHFIC considers that the Submission does not comply with
any one or more of the following requirements:
a. the Submission is written in English (see paragraph 8.1.1);
b. measurements are expressed in Australian legal units of measurement
(see paragraph 8.1.2);
c. the Submission is not a joint or part Submission (see paragraphs 8.2.1.a
and 8.2.1.b);
d. the Submission includes a completed and signed Respondent’s Deed in the
form provided (see Part B in Schedule 2).

9.4. Conditions for participation


9.4.1. The NHFIC will exclude a Submission from further consideration if at any time
before a resultant Participating Lender Deed is executed, the NHFIC considers
that the Respondent does not meet any one or more of the following conditions
for participation:
a. the Respondent exists as a legal entity at the relevant Closing Time; or
b. the Respondent is a credit provider (as defined in the National Credit Code)
and holds an Australian credit licence under the National Consumer Credit
Protection Act 2009 (Cth) (NCCP Act) or is exempt from the requirement to
hold such a licence under the NCCP Act.
9.4.2. Major Bank Lenders should note that only one legal entity within each Major
Bank Lender group should submit a Submission responding to this RFP.
9.4.3. If two (or more) legal entities within a Major Bank Lender group lodge
Submissions in response to this RFP, the NHFIC may in its absolute discretion:
a. exclude one (or more) of the tendered Submissions; or
b. assess both (or all) Submissions,

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 13
on the basis that only one of the Submissions may form the basis of any
resultant Participating Lender Deed should that Major Bank Lender be
appointed by the NHFIC to the Panel.

9.5. Clarification, short-listing and negotiations


9.5.1. The NHFIC may:
a. use any relevant information obtained in relation to a Submission (provided
in the Submission itself, otherwise through this RFP or by independent
inquiry) in the evaluation of Submissions;
b. seek clarification or additional information from any Respondent for the
purposes of evaluating Submissions;
c. shortlist one or more Respondents and seek further information from them;
d. enter into negotiations or discussions with one or more Respondents; or
e. discontinue negotiations or discussions with a Respondent, whether or not
the Respondent has been notified that it is a preferred Respondent.
9.5.2. Respondents should nominate in their Submission a person for the purpose of
responding to any clarification requests which may arise during Submission
evaluation or receiving other notices during the RFP process. Respondents
should include the name, address and contact details of that person in Part A
(Respondent’s Details) of Schedule 2. The person nominated by the
Respondent must be authorised to represent and bind the Respondent in
relation to this RFP.

10. Other Matters

10.1. Public Statements


10.1.1. Except with the prior written approval of the NHFIC, Respondents must not
make a statement, issue any document or material or provide any other
information for publication in any media, concerning this RFP.
10.1.2. The NHFIC may exclude a Submission from further consideration if the
Respondent does not comply with paragraph 10.1.1.

10.2. Additional Rights of the NHFIC


10.2.1. Without limiting other rights contained in this RFP, the NHFIC may do any or all
of the following at any time:
a. seek amended Submissions or call for new Submissions;
b. forward any clarification about this RFP to all known Respondents on a
non-attributable basis and without disclosing any confidential information of
a Respondent;
c. allow or not allow another legal entity to take over a Submission in
substitution for the original Respondent, including where an event occurs

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 14
that has the effect of substantially altering the composition or control of the
Respondent or the business of the Respondent;
d. negotiate with one or more persons who have not lodged Submissions or
enter into an arrangement or other binding relationship for similar services
to the Services outside the RFP process; and
e. discontinue negotiations with any Respondent prior to or after the
commencement of the Panel.
10.2.2. Disclosure to Respondents of any information concerning this RFP process is at
the complete discretion of the NHFIC.

10.3. Finalisation of Participating Lender Deeds


10.3.1. Successful Respondents will be invited to execute the Participating Lender
Deed prepared by the NHFIC. The NHFIC does not intend to enter into
significant negotiations with Respondents in relation to the draft Participating
Lender Deed. The NHFIC reserves the right not to enter into a Participating
Lender Deed where a Respondent seeks to make substantial changes to that
Deed or the Scheme Rules.
10.3.2. Without limiting the NHFIC’s other rights under this RFP, at law or otherwise,
the NHFIC may at any time decide not to proceed with negotiations of a
Participating Lender Deed if, in the NHFIC’s reasonable opinion, it appears that
it will not be possible to enter into a Participating Lender Deed with a preferred
Respondent without protracted negotiations. In this case, the NHFIC will notify
the relevant Respondent that it has decided to discontinue negotiations with that
Respondent in accordance with paragraph 10.2.1.e.

10.4. Publication of contract award


10.4.1. The NHFIC may be required to publish any resultant Participating Lender Deed
in accordance with the Senate Order on Departmental and Agency Contracts.

10.5. Debriefing
10.5.1. Respondents may request an oral debriefing following the establishment of the
panel. Respondents requiring a debriefing should contact the Contact Officer.
10.5.2. Respondents will be debriefed against the evaluation criteria set out in this RFP.
A Respondent will not be provided with information concerning other
Submissions, except for publicly available information such as the name of the
successful Respondents or Panellists. No comparisons with other Submissions
will be made.

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 15
SCHEDULE 1 STATEMENT OF REQUIREMENT

1. Overview

1.1. Structure of NHFIC


1.1.1. The NHFIC was established by the Australian Government in 2018 under the
National Housing Finance and Investment Corporation Act 2018 (Cth) (NHFIC
Act). Amendments to the NHFIC Act were recently passed by the
Commonwealth parliament to enable the NHFIC to implement the First Home
Loan Deposit Scheme (the Scheme)
1.1.2. The primary policy objective of the Scheme is to benefit first home buyers by
enabling them to purchase their first home more quickly. Target beneficiaries
are first home buyers with a taxable income of not more than $125,000 (for
singles) and $200,000 (combined, for couples) who have saved less than the
standard 20% deposit requirement (but with a deposit of at least 5% saved).

1.2. Summary of Services


1.2.1. To meet the policy objectives of the Scheme, the NHFIC intends to establish the
Panel, comprising of Major Bank Lenders and Non-Major Bank Lenders.
1.2.2. Successful Respondents will be appointed to the Panel to administer the
Scheme on a non-exclusive basis. On appointment, Panellists will be able to
offer to eligible first home buyers eligible loans that have the benefit of the
guarantee from the NHFIC. Details of the guarantee and the key design
features of the Scheme are set out below.
1.2.3. The Scheme is expected to commence on 1 January 2020 (the
Commencement Date). Recognising the resources required to administer the
Scheme and the anticipated requirements of the NHFIC’s Investment Mandate,
the NHFIC is proposing to:
a. by early December 2019, select and engage up to 2 Major Bank Lenders to
the Major Bank Lender sub-panel that can demonstrate, to the NHFIC’s
satisfaction, that they are best placed to meet the evaluation criteria and
commence administering the Scheme from the Commencement Date;
b. by 20 December 2019, select and engage to the Non-Major Bank Lender
sub-panel, any Non-Major Bank Lenders that have demonstrated, to the
NHFIC’s satisfaction, that they meet the evaluation criteria and are capable
of administering the Scheme from the Commencement Date; and
c. subsequently engage to the Non-Major Bank Lender sub-panel, other Non-
Major Bank Lenders that have demonstrated, to the NHFIC’s satisfaction,
that they meet the evaluation criteria and have the capability to administer
the Scheme before 1 March 2020.

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 16
2. Required Services

2.1. Scheme Features


2.1.1. The Key Scheme Features outlined below are subject to directions from the
Australian Government as set out in the National Housing Finance and
Investment Corporation Investment Mandate Amendment (First Home Loan
Deposit Scheme) Direction 2019 and should not be taken to be a complete and
accurate summary of the Scheme.

Proposed Key Scheme Features

Guarantee A contractual guarantee to be given by NHFIC in favour of


participating lenders (Guarantee) who have funded eligible loans to
Scheme borrowers (Scheme-Backed Loans). Up to 10,000
Scheme-backed loans nationally will be able to take the benefit of
the Scheme in each financial year.
The Guarantee will provide for:
• a guaranteed amount that is limited to the difference between:
o the deposit applied by the Scheme borrower (minimum
5 per cent of the value for the relevant eligible property);
and
o 20 per cent of the value of the eligible property that is
the subject of the eligible loan,
(Guaranteed Amount, which enables up to a maximum of
15% of the purchase price for the eligible property to be
guaranteed); and
• upon default and enforcement of security for a Scheme-
Backed Loan, claims to be made by the Participating Lender
for unpaid amounts owing by the Scheme borrower (with
coverage intended for principal, accrued interest and holding
and sale costs) up to the Guaranteed Amount for that loan.
NHFIC will maintain a register of Scheme-Backed Loans and will
issue Guarantee certificates to participating lenders (setting out the
Guaranteed Amount) for each such loan.
Eligible loans Eligible loans will be owner-occupier residential mortgage loan
products made by an eligible lender on the Panel:
• to no more than two borrowers (where there are two borrowers
under the loan agreement, each borrower must be the spouse
or de facto partner of the other borrower);
• to eligible first home buyer(s);
• for the purpose of residential property that is to be owner-
occupied;
• if the loan relates to the purchase of vacant land, it must also
relate to the construction of a dwelling on the land;

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 17
• where the loan-to-value ratio is between 80 and 95 per cent;
• where the loan term is no more than 30 years; and
• requiring scheduled repayments of the principal of the loan for
the full period of the agreement except for construction loans
where the terms of the loan agreement may permit interest-
only repayments.

Eligible first Persons who will be eligible as borrowers of Scheme-Backed Loans


home buyers will:
• be singles or couples (both) that are first home buyers;
• be at least 18 years of age;
• be Australian citizens; and
• have taxable income of not more than $125,000 (for singles)
and $200,000 (combined, for couples) in the preceding income
year,
at the time a loan agreement for the Scheme-Backed Loan is
entered into.

Eligible Any residential dwelling type (existing or newly-built) located in


properties Australia which is purchased at a price below the specified price
caps.

2.1.2. Respondents should review the terms of the draft Participating Lender Deed,
Scheme Rules and Deed of Guarantee for further details on how the Scheme is
to be administered.

2.2. Indicative timeframes and panel size


2.2.1. The resultant Panel arrangements are expected to commence from the
Commencement Date with the Panel having an initial term of 2 ½ years.
2.2.2. The NHFIC is planning to select up to 2 Major Bank Lenders to the Panel from
the Commencement Date.
2.2.3. Depending on the demonstrated capacity of Non-Major Bank Lenders to
administer the Scheme, as part of this RFP process the NHFIC may appoint
Non-Major Bank Lenders to the Panel to commence administering the Scheme
at any time between the Commencement Date and 1 March 2020.
2.2.4. Respondents who are unsuccessful in this RFP and are not appointed to the
Panel may be invited to participate in any subsequent Panel Refresh.

2.3. Guarantee allocations


2.3.1. To meet the anticipated requirements of the NHFIC’s Investment Mandate, the
total number of guarantees issued to Major Bank Lenders in a financial year will
not exceed 5,000 guarantees.

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 18
SCHEDULE 2 RESPONSE FORMS

Respondents should ensure that their Submissions include, as a minimum, each of the
Response Forms attached to this Schedule 2.

Part A Respondent’s Details


Respondents should provide full responses in completing the following information to
enable the NHFIC to clearly identify the entity responding to the RFP.

Respondent
This is the name of the legal entity who will enter into a Participating Lender Deed
with the NHFIC and agree to comply with the Scheme Rules.

Major Bank Lenders should be aware that only one (1) legal entity within a Major
Bank Lender group should lodge a Submission in response to this RFP.
1. Full name of Respondent:

2. Trading or business name of Respondent:

3. Respondent’s Contact who is authorised to represent and legally bind the


Respondent (including name, address and other contact details):

If a company
4. The registered office:

5. The principal place of business:

6. The date and place of incorporation and the Australian Company Number:

7. Any related companies within the meaning of section 50 of the Corporations Act
2001 (Cth):

If a trustee
8. Provide details of the relevant trust including a copy of the relevant trust deed
(including any variations to that deed):

If a partnership

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 19
9. Provide details of the relevant partnership including a copy of the relevant
partnership agreement:

Australian credit licence details


10. Do you have an Australian Credit licence number?
a. If yes, please provide your Australian Credit licence number:
b. If no, please provide details of the relevant exemption that applies – including
the relevant section or regulation under the National Consumer Credit
Protection Act 2009 (Cth):

Lender Group Members


If the Respondent operates more than one residential mortgage brand (either via a
division within the Respondent, a wholly owned subsidiary or other kind of related
body corporate) (a Lender Group Member) the Respondent must provide details
at item 11 below of each such Lender Group Member that the Respondent wishes
to nominate to offer Scheme-Backed Loans (as defined in the Participating Lender
Deed).

Part C of Schedule 2 of this RFP must also be answered by the Respondent


and, if applicable, by all Lender Group Members (if any) listed at item 11
below.

11. Please provide details specified in items 1 to 10 above for each Lender Group
Member:

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 20
Part B Respondent’s Deed Poll
Respondents must complete this Respondent's Deed Poll and include it in their Submission
response. Amendments may only be made where necessary to complete the Deed.

DEED POLL
Date: ^insert date^
By: ^insert full legal name of Respondent^ (Respondent)

Context
Request for Proposal in relation to the establishment of a panel of lenders for the provision
of services to administer the First Home Loan Deposit Scheme (RFP).

Interpretation
In this Deed Poll, terms not otherwise defined have the meaning ascribed to them in the
RFP.

Compliance with RFP


The Respondent represents that it has read and understood, and that its Submission is
submitted in accordance with, the RFP.
The Respondent undertakes that it will continue to participate in the RFP process in
accordance with the RFP and on the basis of its Submission.

Offer
The Submission constitutes an offer (Offer) to provide the Services on the terms and
conditions set out in the Participating Lender Deed, subject to any exceptions noted in its
Statement of Non-Compliance submitted as part of its Submission, and accordingly is
capable of immediate acceptance by the NHFIC so as to form a binding agreement.
The Offer remains open for acceptance by the NHFIC for the Offer Period. The Respondent
undertakes not to withdraw, vary or otherwise compromise the Offer during the Offer
Period.
If directed by the NHFIC, the Respondent will execute the Participating Lender Deed in the
form set out in Schedule 3, subject to any amendments noted in the Respondent’s
Statement of Non-Compliance, without entering into further negotiation.
To the extent that the Submission does not include complete information relating to matters
required for the completion of the Participating Lender Deed, the NHFIC may complete the
Participating Lender Deed at its reasonable discretion, and the Respondent shall execute
the resultant Deed.

Confidentiality
The Respondent will not, and will ensure that its employees, agents or subcontractors do
not, either directly or indirectly record, divulge or communicate to any person any
confidential information concerning the affairs of the NHFIC, the Commonwealth or a third

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 21
party acquired or obtained in the course of preparing a Submission, or any documents, data
or information provided by the NHFIC and which the NHFIC indicates to Respondents is
confidential or which Respondents know or ought reasonably to know is confidential.

Ethical Dealing
The Respondent represents that its Submission has been compiled without the improper
assistance of any current or former NHFIC officer, employee, contractor or agent and
without the use of information obtained unlawfully or in breach of an obligation of
confidentiality to the NHFIC.
The Respondent represents that it has not:
a. engaged in any collusive tendering, misleading or deceptive conduct,
anti-competitive conduct, or any other unlawful or unethical conduct with any other
Respondent, or any other person in connection with the preparation of their
Submission or the RFP process;
b. attempted to solicit information from or influence improperly any current or former
officer, employee, contractor or agent of the NHFIC, or violate any applicable laws
or Commonwealth policies regarding the offering of inducements in connection with
the RFP process; or
c. otherwise acted in an unethical or improper manner or contrary to any law.

Conflict of Interest
The Respondent represents that, having made all reasonable enquiries the following list
represents its only known actual or potential conflicts of interest in respect of the RFP, its
Submission or the provision of the Services:
— ^insert list or, where no conflict exists, write ‘none’^
The Respondent undertakes to advise the NHFIC in writing immediately upon becoming
aware of any actual or potential conflicts of interest in respect of the RFP, its Submission or
the provision of the Services.

Employee entitlements
The Respondent represents that, having made all reasonable enquiries, as at the date of
this Deed Poll, it is not subject to any judicial decisions or any resulting order relating to
employee entitlements (not including decisions under appeal) which claims have not been
paid.

EXECUTED AS A DEED POLL for the benefit of NHFIC


Dated this ^insert day^ day of ^insert month^ 2019

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 22
SIGNED SEALED AND DELIVERED by )
^insert name of Respondent^ by its duly
)
authorised representative:
)
________________________________ ________________________________
^Name of signatory^ Signature)

In the presence of:


________________________________ ________________________________
^Name of witness^ Signature of witness

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 23
Part C Questionnaire

Portfolio data
1. Please provide the following portfolio information:
a. new loans (number and loan amount) originated in the previous 5 financial
years, split by financial year of origination, LVR (<80%, 80-90%, 90-95%) and
geographic region; and
b. for loans issued in the previous 5 financial years:
i. 90+ day delinquency development by quarter, split by financial year of
origination and LVR (<80%, 80-90%, 90-95%);
ii. the percentage of loans that became 90+ day delinquent which were
managed under your Hardship Policy, split by financial year of origination;
iii. 90+ day delinquency cure rate, split by financial year of origination; and
iv. Mortgagee-In-Possessions, split by financial year of origination.

Note to Respondents: for the purposes of question 1.a, geographical split by region based
on your internal postcode groupings is acceptable.

Policy information
2. Please provide a summary of each of the following policy documents with respect to
your current residential mortgage lending activities:
a. Credit Policy, including serviceability criteria, calculation methodology and
information regarding the method of assessing creditworthiness of borrower;
b. Valuation Policy, including minimum valuation standards and valuer
accreditation process;
c. Collections/ Loss Management Policy and information regarding the process
of monitoring the status of loans to identify when there is a significant
likelihood of a borrower defaulting on their obligations under a loan;
d. Hardship Policy (if separate from Collections/ Loss Management Policy);
e. Postcode restriction list loan to value ratio;
f. Delegated Lending Authority levels for high (90%+) LVR loans; and
g. any other customer care policies.
Please also:
h. outline the process and governance arrangements that you employ when
actioning changes to the above policies; and

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 24
i. provide copies of the above policies and any supporting documents.

Note to Respondents: responses to this question 2 (excluding the copies of policies to be


attached in accordance with paragraph 2.i.) should not exceed 3 pages in total.

3. Noting the response provided to question 2 above, would those same policies apply
to Scheme-Backed Loans? If not, please specify the variations that would be
required to existing practices. Please include details on:
a. the changes (if any) that you propose to make to your existing Credit Policy to
accommodate Scheme-Backed Loans;
b. how you intend to classify the Scheme-Backed Loans for the purposes of
applying your Credit Policy (e.g. will you apply the pre-guarantee or
post-guarantee LVR);
c. the borrower segment(s), if any, that will become eligible for mortgage finance
as Scheme-Backed Loans but which do not currently qualify under your
existing Credit Policy.

4. Are any parts of your Credit or Collections/ Loss Management function outsourced?
If yes, please provide details of:
a. the outsourced functions;
b. the service provider(s) used; and
c. the processes that you employ to monitor service provider performance.

5. Please provide the results and recommendations of all internal Quality Assurance
(“QA”) reviews (if any) with respect to your current residential mortgage lending
activities undertaken in the last 24 months, and which outline your compliance with
the policies outlined in question 2 above.

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 25
Pricing information
6. With respect to your mortgage pricing:
a. does your current pricing differ for high LVR mortgages (i.e. >80% LVR)
compared to your other mortgage lending? If yes, please provide details;
b. based on your current funding costs, what interest rate, fees and other
charges (including default interest rates and associated enforcement costs) do
you propose to offer on Scheme-Backed Loans? Please provide a
comparison of how this rate differs from your current rate for
non-Scheme-Backed Loans, including the rationale for any differences;
c. will Scheme-Backed Loans continue to be priced at the same level relative to
non-Scheme-Backed Loans throughout their term? If not, please describe the
circumstances under which Scheme-Backed Loan pricing may change relative
to non-Scheme-Backed Loan pricing; and
d. does your loan pricing distinguish between first home buyers and other home
loans? If so, please outline the differences.

Implementation
7. Please describe the steps that need to be undertaken by your organisation for you to
be able to make Scheme-Backed Loans available to first home buyers by 1 January
2020 (for Major Bank Lenders) or before 1 March 2020 (for Non-Major Bank Lenders
that cannot support a 1 January 2020 start date). This should include an
implementation plan that includes:
a. an implementation strategy, milestones and schedule;
b. the extent of system changes (if any) required and your capacity to deliver
these;
c. the nature and extent of manual workarounds that you will put in place to
support the Scheme; and
d. the level of support and activities you require from the NHFIC in order to make
Scheme-Backed Loans available to first home buyers by 1 January 2020.

Note to Non-Major Bank Lenders: If you cannot support a 1 January 2020 start date, please
advise your readiness to implement before 1 March 2020 and your proposed implementation
date.

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 26
8. Please describe the steps within the loan origination process you propose to adopt to
originate a Scheme-Backed Loan (includes steps for pre-approval, valuation of any
existing property and valuation where the loan includes financing for the construction
of a dwelling, final approval and settlement).

9. Please provide information regarding the loan products that you intend to offer as
Scheme-Backed Loans. This should include:
a. summary of product features;
b. any re-draw or offset features: and
c. any promotions or incentives available to borrowers.

10. Do you intend to undertake any marketing initiatives in conjunction with the launch of
the Scheme? If so, please provide details.

11. Do you intend to originate Scheme-Backed Loans through mortgage aggregators/


brokers? If so, then please advise:
a. the percentage of your current residential mortgage lending that is sourced
through these channels;
b. the processes that you employ to accredit aggregators/ mortgage brokers and
monitor their performance;
c. whether you provide aggregators/ mortgage brokers with a DLA (if yes, please
provide details); and
d. how Scheme-Backed Loans will be accessible via these channels.

12. How will you confirm borrower eligibility for the Scheme? In particular, please provide
details on how you will:

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 27
a. confirm that a borrower is an eligible first home buyer; and
b. confirm that a borrower will be an owner-occupier of the purchased property.

13. Please provide details of:


a. any regulatory matter (in the last 5 years);
b. any other matter that has had (in the last 5 years) or may have a material
adverse effect on the reputation of your organisation.

Note to Respondents: this includes any claims, litigation or threatened litigation and any
investigation or adverse findings.

14. Please detail any steps you will take to minimise the likelihood of claims occurring
under the Scheme. This could include (but is not limited to):
a. effective lending origination practices; and
b. working with clients to cure defaulted loans.

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 28
Part D Statement of Non-Compliance
Respondents lodge their Submissions on the basis that they comply with all requirements
specified in the body of the RFP. In the case of the Schedules to the RFP (including the
description of the Services in Schedule 1 and the Participating Lender Deed and Scheme
Rules in Schedule 3), Respondents’ compliance is subject to any exceptions noted in their
response to this Statement of Non-Compliance in Part D of Schedule 2.
Respondents should indicate the extent to which they partially comply or do not comply with
each paragraph of the description to the Services and each provision of the draft
Participating Lender Deed and Scheme Rules, including all schedules and attachments,
taking into account any amendments to those provisions that may have been issued by the
NHFIC during the RFP process.
Respondents should note that the extent of non-compliance will be a factor in the
evaluation process. The compliance statement will form the basis for any contract
negotiations that may occur with a Respondent.
In respect of the non-compliance statement, Respondents should indicate their level of
non-compliance with any provision using one of the terms: “does not comply”, “partially
complies” and “not applicable”. These terms have the following meanings:

does not comply means that the Respondent will not comply without amendment
partially complies means that the Respondent will comply partially and that some
amendment is required
not applicable means that the provision does not apply to the Respondent or is
to be completed (e.g. the schedule item dealing with fees).

The Respondent will be taken to be and assessed as compliant with any provision,
schedule or attachment which it does not list in the non-compliance statement.
Respondents may group provisions where the response is the same for each of those
provisions. For example ‘Paragraphs 3.1 to 3.15 – Does Not Comply’, or ‘Schedule 1 –
Partially Complies’.
Where a Respondent does not comply or only partially complies with a provision, the extent
of non-compliance should be stated in full in the compliance statement. In this case, the
Respondent should then provide:
a. specific reasons for the partial or non-compliance; and
b. specific language of any proposed amendments, including any deletions or
additional provisions.
In accordance with paragraph 5.2.3, Respondents should also include in their compliance
statement any request that information be treated as confidential following the execution of
a Participating Lender Deed.
The following format should be used in completing the non-compliance statement:

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 29
Statement of Non-Compliance

Table 1: Provide details of any non-compliances with Statement of Requirement in


Schedule 1 of the RFP. If you fully comply with Schedule 1, simply write ‘Nil’ in the box
below.
Paragraph/schedule/attachment Nature of non-compliance Proposed wording of any
amendment to the provision

Table 2: Provide details of any non-compliances with draft Participating Lender Deed in
Schedule 3 of the RFP. If you fully comply with the draft Participating Lender Deed, simply
write ‘Nil’ in the box below.
Paragraph/schedule/attachment Nature of non-compliance Proposed wording of any
amendment to the provision

Table 3: Provide details of any non-compliances with draft Scheme Rules in Schedule 3 of
the RFP. If you fully comply with the draft Scheme Rules, simply write ‘Nil’ in the box below.
Paragraph/schedule/attachment Nature of non-compliance Proposed wording of any
amendment to the provision

Request to keep Information Confidential

Table 4: Information to be contained in Participating Lender Deed


Item Period of Confidentiality Reason why it is necessary to
keep information confidential

Table 5: Information to be obtained or generated in performing the Services under the


Participating Lender Deed
Item Period of Confidentiality Reason why it is necessary to
keep information confidential

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 30
SCHEDULE 3 DRAFT PARTICIPATING LENDER DEED AND SCHEME RULES

The draft Participating Lender Deed and Scheme Rules follow after this page.

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 31
First Home Loan Deposit Scheme
Template Document

Participating Lender Deed

What is this document usually Participating Lender Deed.


called?

Who is it between? National Housing Finance and Investment Corporation (NHFIC).


Any lender approved by NHFIC (Participating Lender) to participate
under the First Home Loan Deposit Scheme (Scheme).

What does it do? Provides an overall framework for the approval of each Participating
Lender to a panel of lenders, and for the conduct and performance by
that Participating Lender of activities in connection with, the Scheme
(Scheme Panel Appointment). Each Scheme Panel Appointment is a
bilateral arrangement between NHFIC and a Participating Lender.

What matters does it cover? - Conditions for engagement, standards of conduct, performance and
termination.
- Use of information, general administration and dispute resolution.

What other documents are closely - Deed of Guarantee – provides for a contractual guarantee
related to it? (Guarantee) to be made by NHFIC in favour of Participating Lenders
who have funded eligible loans under the Scheme.

- Scheme Rules – establishes certain capacity, participation and


eligibility criteria for the Scheme, and may be updated from time to
time for developments in the Scheme. The Scheme Rules form part of
the Participating Lender Deed.
This template document is provided for the purposes of the Request for
Why is this template document Proposal (RFP) released on 28 October 2019 and issued by NHFIC in
available? connection with the Scheme. Respondents to the RFP are advised that
NHFIC will be responsible for the finalisation of the Participating Lender
Deed, and this template document is intended to be used as the basis for
informing lenders’ responses to the RFP.
This document is provided in draft and will be finalised as part of a
document package available to those lenders selected by NHFIC to form
part of the panel arrangement and administer the Scheme.
Respondents are advised that NHFIC will be responsible for the initial
preparation and any re-drafting of each Participating Lender Deed in
connection with any Scheme Panel Appointment, and this template
document is intended to be used as the basis for informing lenders’
responses to the RFP. NHFIC would expect to take into account in any
evaluation of a Scheme Panel Appointment any requests for material
departures from the template document and the reasons for the
departures and the possible implications for time, cost and efficiency. A
Respondent’s degree of compliance with this document will be a key
consideration in the selection of Respondents for appointment to the
Panel. This document is provided in draft and will be finalised as part of
the document package available to those lenders selected by NHFIC.
First Home Loan Deposit Scheme

Participating Lender Deed


Dated [●]

National Housing Finance and Investment Corporation (ABN 22 498 714 570)
[Participating Lender(s)]

[Note – where more than one legal entity from a lender group is approved and appointed as a
Participating Lender, it is intended that each such entity will execute this document. However, if a
lender group so requires, NHFIC may agree to execute individual Participating Lender Deeds with
each entity, provided they are on identical and finalised terms (other than for matters to be set out in
the Appointment Terms which relate to the different identities of those entities).]
Participating Lender Deed
Contents

Details 1
General terms 2

1 Definitions and interpretation 2


1.1 Scheme Rules 2
1.2 Other defined terms 2
1.3 General interpretation 5
1.4 Designations 6
1.5 [Participating Lenders] 6

2 Appointment and term 7


2.1 Approval as Participating Lender 7
2.2 Duration 7
2.3 Relationship management 7
2.4 Scope of relationships 8

3 Scheme Documents 8
3.1 Scheme Rules 8
3.2 Changes to Appointment Terms 8
3.3 Effect of amendments 9
3.4 Order of precedence 9

4 Offer of Scheme-Backed Loans 9


4.1 Entitlement to offer 9
4.2 Nominated Brands 9
4.3 Role and responsibilities 9
4.4 Assessment of loan applications 10
4.5 Requirements for Reserve & Pre-Approval Applications 10
4.6 Appointment of Representatives 10

5 External communications and Scheme promotion 10


5.1 Authorised Information 10
5.2 Communications and marketing 11

6 Making and administering Scheme-Backed Loans 12

7 Undertakings 12
7.1 Lending policies and practices 12
7.2 General undertakings 13

8 Representations and warranties 14

9 Indemnity 15

10 Suspension Events 15
10.1 Suspension Events 15
10.2 Consequences of a Suspension Event 16

43259467_12 Participating Lender Deed i


11 Force Majeure 16

12 Termination 17
12.1 Termination by NHFIC 17
12.2 Termination by Lender 17
12.3 Effect of Termination 17
12.4 Transition out arrangements 18

13 Disputes 18
13.1 Negotiation of Disputes 18
13.2 Independent Expert 18

14 Notices in relation to the Scheme Documents 19

15 Confidentiality & privacy 20


15.1 No disclosure 20
15.2 Disclosure by NHFIC 20
15.3 Privacy 21

16 Outsourcing 21

17 Dealing with interests 22


17.1 No assignments or novation by Participating Lender 22
17.2 Assignments and novations by NHFIC 22

18 General 22
18.1 Amendments 22
18.2 Compliance with policies and audit requirements 22
18.3 Compliance with NHFIC Act 23
18.4 Work Health and Safety 23
18.5 No reliance 23
18.6 Waivers and discretions 23
18.7 Conduct of business by NHFIC 24
18.8 Costs 24
18.9 Further assurances 24
18.10 Partial invalidity 24
18.11 Indemnities and reimbursement 24
18.12 Governing law and jurisdiction 24
Schedule Appointment Terms 25
Signing page 26

43259467_12 Participating Lender Deed ii


Participating Lender Deed
Details

Parties NHFIC and [the / each] Participating Lender

NHFIC Name National Housing Finance and Investment


Corporation

ABN 22 498 714 570

Address Level 10, Export House


22 Pitt Street
Sydney NSW 2000

Telephone [●]

Email [●]@FHLDSnhfic.gov.au

Attention [●]

Participating Name [●]


Lender[s]
ABN [●]

Address [●]

Telephone [●]

Email [●]

Attention [●]

Recitals A NHFIC is responsible for the establishment and


implementation of the Scheme.

B This document is a Participating Lender Deed as referred


to in the Scheme Rules and sets out the arrangements
agreed between NHFIC and [the / each] Participating
Lender in relation to the Participating Lender’s participation
under the Scheme.

Date of [●]
document

43259467_12 Participating Lender Deed 1


Participating Lender Deed
General terms

1 Definitions and interpretation


1.1 Scheme Rules
Terms defined in the Scheme Rules have the same meanings when used in this
document.

1.2 Other defined terms


Unless the contrary intention appears, in this document these terms have the
following meanings:

Appointment Terms means the terms and conditions set out in the Schedule
(“Appointment Terms”) to this document (as supplemented or replaced from time
to time in accordance with clause 3.2 (“Changes to Appointment Terms”)).

Authorised Information has the meaning given in clause 5.1 (“Authorised


Information”).

Authorised Person means:

(a) for NHFIC:

(i) the Chief Executive Officer of NHFIC; or

(ii) any person appointed by NHFIC as an Authorised Person for the


purposes of the Scheme Documents or that is duly authorised
by NHFIC or by law to act on its behalf in respect of the relevant
act or thing; and

(b) for the Participating Lender:

(i) an officer of the Participating Lender performing the role or


functions specified for the purposes of this definition in the
Appointment Terms; or

(ii) any other person appointed by that party as an Authorised


Person for the purposes of the Scheme Documents or that is
duly authorised by the Participating Lender to act on its behalf in
respect of the relevant act or thing.

Business Day means a day (excluding Saturday and Sunday) on which banks
are generally open in Sydney and (if applicable) each other place specified in the
Appointment Terms.

Commencement Date has the meaning given in the Appointment Terms.

Commonwealth means the Commonwealth of Australia.

Commonwealth Entity has the meaning given to the term “Commonwealth


entity” under the PGPA Act.

Corporations Act means the Corporations Act 2001 (Cth).

43259467_12 Participating Lender Deed 2


Costs includes costs, charges and expenses, including those incurred in
connection with advisers (legal or otherwise).

Details means the section of this document headed “Details”.

Dispute includes any dispute, controversy, difference or claim arising out of or in


connection with the Scheme Documents or the subject matter of the Scheme
Documents, including any question concerning their formation, validity,
interpretation, performance, breach and termination and/or NHFIC’s
administration of the Scheme.

Finance Law has the meaning given to that term in the PGPA Act.

Force Majeure Event means an event beyond the reasonable control of either
party which makes it impossible or illegal to perform, or prevents compliance with
or the performance of, a party’s obligations under any Scheme Document
(including, without limitation, acts of God, strikes, lockouts, riots, war, acts of a
third-party engaged in subversive or terrorist activities, epidemics, governmental
action, fire, communication line failures, power failures, earthquakes or other
disasters).

An Insolvency Event occurs in relation to the Participating Lender if:

(a) it is (or states that it is) an insolvent under administration or insolvent


(each as defined in the Corporations Act);

(b) it is in liquidation, in provisional liquidation, under administration or


wound up or has had a Controller (as defined in the Corporations Act)
appointed to its property;

(c) it:

(i) is subject to any arrangement, assignment, moratorium or


composition, protected from creditors under any statute; or

(ii) is dissolved,

(in each case, other than to carry out a reconstruction or amalgamation


while solvent on terms approved by NHFIC);

(d) it institutes or has instituted against it, by a regulator, supervisor or any


similar official with primary insolvency, rehabilitative, resolution or
regulatory jurisdiction over it in the jurisdiction of its incorporation or
organisation or the jurisdiction of its head or home office, a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under
any bankruptcy or insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or liquidation by it or
such regulator, supervisor or similar official;

(e) an application or order has been made (and, in the case of an


application, it is not stayed, withdrawn or dismissed within 21 days),
resolution passed, or any other action taken, in each case in connection
with that person, in respect of any of paragraphs (a), (b) or (c) of this
definition;

(f) it is taken (under section 459F(1) of the Corporations Act) to have failed
to comply with a statutory demand;

(g) it is the subject of an event described in section 459C(2)(b) or section


585 of the Corporations Act (or it makes a statement from which NHFIC
reasonably deduces it is so subject);

43259467_12 Participating Lender Deed 3


(h) it is otherwise unable to pay its debts when they fall due; or

(i) something having a substantially similar effect to paragraphs (a) to (g) of


this definition happens in connection with that person under the law of
any jurisdiction.

Lender Designation means the Participating Lender’s designation as a Major


Bank or Non-Major Bank Lender for the purposes of the Scheme Rules, as
confirmed in the Appointment Terms.

Lender Policies has the meaning given in the Appointment Terms.

Media & Publicity Policy has the meaning given in the Appointment Terms.

NHFIC means National Housing Finance and Investment Corporation (ABN 22


498 714 570).

NHFIC Act means the National Housing Finance and Investment Corporation Act
2018 (Cth).

NHFIC Investment Mandate means the National Housing Finance and


Investment Corporation Investment Mandate Direction 2018 (Cth).

Nominated Brand means each division name, brand or trading name of the
Participating Lender that used by it in connection with residential mortgage
lending that will represent the Participating Lender in connection with the offer of
Scheme-Backed Loans, as specified in Appointment Terms.

Ongoing Provisions means all of the provisions of this document other than the
Offer Provisions.

Offer Provisions means clauses 2.1 (“Approval as Participating Lender”), 2.2(a)


(“Duration”), 4 (“Offer of Scheme-Backed Loans”) and 12 (“Termination”).

Participating Lender means [the / each] person specified in the Details.

PGPA Act means the Public Governance, Performance and Accountability Act
2013 (Cth).

Power means a power, right, authority, discretion or remedy which is conferred


on a person:

(a) under any Scheme Document; or

(b) by law in relation to any matters contemplated by a Scheme Document.

Privacy Laws means:

(a) any legislation (to the extent that such legislation applies to NHFIC or the
Participating Lender, or any other recipient of personal information
and/or health information) from time to time in force in any:

(i) Australian jurisdiction (which includes the Commonwealth of


Australia and any State or Territory of Australia); or

(ii) non-Australian jurisdiction (to the extent that NHFIC or the


Participating Lender is subject to the laws of that jurisdiction in
respect of any personal information and/or health information);

43259467_12 Participating Lender Deed 4


(b) affecting privacy, personal information, health information or the
collection, handling, storage, processing, use or disclosure of personal
data; and

(c) any ancillary rules, guidelines, orders, directions, directives, codes of


conduct or other instruments made or issued thereunder.

Relationship Manager has the meaning given in clause 2.3 (“Relationship


management”).

Representative means each third-party broker or other person that is authorised


by the Participating Lender in accordance with clause 4.6 (“Appointment of
Representatives”) to offer Scheme-Backed Loans on its behalf.

Scheme means the Australian Government’s First Home Loan Deposit Scheme,
established by NHFIC in accordance with the NHFIC Act and the NHFIC
Investment Mandate.

Scheme Documents means each of:

(a) this document;

(b) the Guarantee; and

(c) the Scheme Rules.

Scheme Materials has the meaning given in the Appointment Terms.

Scheme Place Allocation has the meaning given in the Appointment Terms.

Scheme Portal User Manual has the meaning given in the Appointment Terms.

Scheme Rules means the First Home Loan Deposit Scheme – Scheme Rules
published by NHFIC.

Suspension Event has the meaning given in clause 10.1 (“Suspension Events”).

WHS Legislation means:

(a) the Work Health and Safety Act 2011 (Cth) and Work Health and Safety
Regulations 2011 (Cth); and

(b) any corresponding WHS law as defined in section 4 of the Work Health
and Safety Act 2011 (Cth).

1.3 General interpretation


Headings (including those in brackets at the beginning of paragraphs) are for
convenience only and do not affect the interpretation of this document. Unless
the contrary intention appears, a reference in this document to:

(a) a group of persons is a reference to any 2 or more of them jointly and to


each of them individually;

(b) an agreement, representation or warranty in favour of 2 or more persons


is for the benefit of them jointly and each of them individually;

(c) an agreement, representation or warranty by 2 or more persons binds


them jointly and each of them individually;

43259467_12 Participating Lender Deed 5


(d) anything (including an amount) is a reference to the whole and each part
of it;

(e) a document (including this document) includes any variation or


replacement of or supplement to it;

(f) a “law” includes common law, principles of equity, decree and any
statute or other law made by any parliament (and statutes or other law
made by parliament includes any regulations and other instruments
under it and consolidations, amendments, re-enactments or
replacements of it);

(g) “Australian dollars” or “$” is a reference to the lawful currency of


Australia;

(h) a time of day is a reference to Sydney time;

(i) the singular includes the plural and vice versa;

(j) a “person” includes an individual, corporation, company, firm, tribunal,


undertaking, association, organisation, partnership, joint venture, trust,
limited liability company, unincorporated organisation or government or
any agency, instrumentality or political subdivision thereof; in each case
whether or not being a separate legal entity;

(k) a particular person includes a reference to the person’s executors,


administrators, successors, substitutes (including persons taking by
novation) and assigns;

(l) a “party” is a reference to a party to this document; and

(m) the words “including”, “for example” or “such as” when introducing an
example, do not limit the meaning of the words to which the example
relates to that example or examples of a similar kind;

(n) a notice or other communication that must be given within a certain


period of days, the day on which the notice or communication is given,
and the day on which the thing is to happen, are not be counted in
calculating that period; and

(o) a notice, report or other communication being provided in writing


includes that notice, report or communication being provided in an
electronic form where permitted under the Scheme Rules.

1.4 Designations
For the purposes of the Scheme Rules, the following designations apply:

(a) this document is a “Participating Lender Deed”; and

(b) the Participating Lender is a “Participating Lender”.

[Note – the following clause 1.5 to be inserted if more than one legal entity from
a lender group enters into this document.]

1.5 [Participating Lenders]


[Each person named in the Details as a Participating Lender enters into this
document individually (and not jointly with the other persons so named), and this
document constitutes, and will be construed to constitute, a separate contract
between NHFIC and that Participating Lender.]

43259467_12 Participating Lender Deed 6


2 Appointment and term
2.1 Approval as Participating Lender
(a) NHFIC approves and appoints the Participating Lender to act as a
“Participating Lender” for the Scheme for the purposes of section 29B
(“Eligible lender”) of the NHFIC Investment Mandate and on the terms
set out in this document and the Scheme Rules and the Participating
Lender accepts its appointment.

(b) The approval and appointment of the Participating Lender is not


exclusive and will be subject to periodic review at NHFIC’s discretion
(including that the Participating Lender may be requested by NHFIC to
tender or provide proposals in relation to its ongoing appointment in
relation to the Scheme). NHFIC may approve other “Participating
Lenders” for the Scheme and may obtain services from other persons or
provide services itself in connection with the Scheme.

2.2 Duration
This document commences on the Commencement Date and continues in force:

(a) in respect of the Offer Provisions, until terminated under clause 12


(“Termination”); and

(b) in respect of the Ongoing Provisions, until the Guaranteed Liabilities are
satisfied or extinguished in full.

2.3 Relationship management


(a) Each party will appoint an officer or employee (Relationship Manager)
to manage the relationship between the Participating Lender and NHFIC
and to ensure the performance and compliance with the respective
obligations under the Scheme Documents. Each party will ensure that it
always has a person, whether a temporary alternate or a replacement,
filling the position of Relationship Manager.

(b) Each party shall promptly notify the other party in writing upon any new
appointment, replacement or change to the person in the role of
Relationship Manager.

(c) The Relationship Managers will meet (in Sydney or by telephone or other
mutually agreeable means) with each other:

(i) monthly (or such other agreed frequency); and

(ii) at the written request of either Relationship Manager, on an


extraordinary basis,

to discuss any matters arising out of the Scheme Documents including,


without limitation, the performance and compliance with the obligations
under the Scheme Documents. The Relationship Managers may require
that other relevant personnel (including, without limitation, those
responsible for day-to-day operations, communications and marketing or
information and communications technology (ICT) services) also attend
those meetings.

43259467_12 Participating Lender Deed 7


2.4 Scope of relationships
(a) NHFIC enters into this document in its capacity as the administrator of
the Scheme and not in its capacity as the guarantor under the
Guarantee.

(b) The approval and appointment as a Participating Lender does not mean
that the Participating Lender:

(i) is a trustee for the benefit of;

(ii) is a partner of;

(iii) is an agent of; or

(iv) has a fiduciary duty to, or other fiduciary relationship with,

NHFIC, the Commonwealth or any other person.

(c) All activities of the Participating Lender in connection with the Scheme
and the Scheme Documents are made by it acting as principal. The
Participating Lender is not acting as agent of NHFIC, the Commonwealth
or any other person in connection with such activities.

3 Scheme Documents
3.1 Scheme Rules
(a) The Participating Lender undertakes and agrees to comply with and
perform all of its obligations under the Scheme Rules.

(b) The Participating Lender acknowledges and accepts that NHFIC may
amend or supplement the Scheme Rules from time to time in
accordance with Rule 11 (“Changes to these Scheme Rules”) of the
Scheme Rules.

3.2 Changes to Appointment Terms


(a) Part 2 (“Operational Terms”) of the Appointment Terms may be
amended or supplemented from time to time by written notice by:

(i) NHFIC, in the case of the Media & Publicity Policy, any Scheme
Materials, Scheme Place Allocation and the Scheme Portal User
Manual; and

(ii) the Participating Lender, in the case of any Lender Policies or


Nominated Brands, provided that it may not deliver any such
notice in relation to a Lender Policy that has been amended,
varied or replaced unless NHFIC first confirms that it is satisfied
that the successor policy does not change the practices or
procedures of the Participating Lender in a manner that makes
the operation of them in connection with any Scheme-Backed
Loan materially adverse to the interests of NHFIC or the
Commonwealth or are inconsistent with the interests of the
Scheme.

(b) Any notice given by a party under this clause 3.2 may be signed by the
Relationship Manager or an Authorised Person of that party.

43259467_12 Participating Lender Deed 8


3.3 Effect of amendments
The Participating Lender’s obligations under this document shall not be in any
way discharged or impaired by reason of any amendment or variation of any
other Scheme Document.

3.4 Order of precedence


If, in relation to any matter under this document, there is any ambiguity in or
inconsistency between the Scheme Documents or any part of them, the following
order of precedence will apply to resolve the ambiguity or inconsistency:

(a) the Guarantee;

(b) the Scheme Rules (unless a provision includes a statement to the effect
that it is to operate in respect of that matter “despite the Scheme Rules”);

(c) the Appointment Terms; and

(d) the terms and conditions of this document (other than the Appointment
Terms).

4 Offer of Scheme-Backed Loans


4.1 Entitlement to offer
The Participating Lender is entitled to offer Scheme-Backed Loans (including via
Representatives) in accordance with the Eligibility Criteria and its Scheme Places
Allocation.

4.2 Nominated Brands


The Participating Lender will keep NHFIC informed of the Nominated Brands
through which it offers Scheme-Backed Loans. The Participating Lender may do
this by amending or supplementing the Appointment Terms in accordance with
clause 3.2 (“Changes to Appointment Terms”).

4.3 Role and responsibilities


The Participating Lender is solely responsible for:

(a) managing all interactions with Eligible Borrowers and customers in


relation to the Scheme-Backed Loans offered by it (or by its
Representatives);

(b) monitoring the conduct of its Representatives in relation to their


interactions with Eligible Borrowers and customers in relation to any
Scheme activities;

(c) obtaining the consent of Eligible Borrowers and other customers for the
disclosure of personal and other information by it to NHFIC and the
Commonwealth (as required);

(d) preparing, managing and submitting Applications to NHFIC;

(e) interacting with NHFIC as required in relation to Applications;

(f) undertaking the Verification Requirements for each Application; and

(g) providing Information to NHFIC for the purposes of:

43259467_12 Participating Lender Deed 9


(i) assessing a Claim;

(ii) NHFIC’s own compliance procedures; and

(iii) NHFIC performing its functions in accordance with the NHFIC


Act.

4.4 Assessment of loan applications


The Participating Lender undertakes and agrees that all applications for Scheme-
Backed Loans made by Eligible Borrowers and other customers will be assessed
in accordance with applicable Lender Policies.

4.5 Requirements for Reserve & Pre-Approval Applications


The Participating Lender acknowledges and agrees that a Reserve Application or
Pre-Approval Application will not be valid unless it includes all relevant
Application Information.

4.6 Appointment of Representatives


(a) The Participating Lender may appoint one or more Representatives, in
each case, who are appropriately licensed under all Relevant Laws to
make offers of Scheme-Backed Loans on its behalf.

(b) Any such appointment must be evidenced in writing in a document that is


consistent with the Offer Provisions.

(c) If requested by NHFIC, the Participating Lender will promptly provide a


list of its Representatives and a copy of document appointing them.

(d) The Participating Lender:

(i) is responsible for ensuring the suitability of any Representative


and for ensuring that the activities performed by the
Representative meet the requirements of their appointment
terms and the Offer Provisions;

(ii) must ensure that all Representatives comply with their


appointment terms with the Participating Lender and the Offer
Provisions as if they were a party to them;

(iii) by the appointment or involvement of any Representative, is not


relieved from any liability or obligation under the Scheme
Documents; and

(iv) remains liable under the Scheme Documents for the acts or
omissions of any past Representatives as if they were current
Representatives.

5 External communications and Scheme promotion


5.1 Authorised Information
(a) NHFIC authorises the Participating Lender and its Representatives to
give information and make any representation in relation to the Scheme
and the Scheme Documents which is contained in, or is otherwise
consistent with:

43259467_12 Participating Lender Deed 10


(i) the Scheme Materials; and/or

(ii) any other current information, materials or representation


approved in writing by NHFIC for the purposes of this cluse 5.1
from time to time,

and, in each case, which has not been notified by NHFIC to the
Participating Lender, or that the Participating Lender is otherwise aware,
as being withdrawn or out of date (Authorised Information).

(b) NHFIC has not authorised the Participating Lender or any other person
to give any information or make any representation in connection with
the Scheme or the Scheme Documents which is not contained in, or
consistent with, the Authorised Information. However, this does not
prevent the Participating Lender or its Representatives from giving
Eligible Borrowers and other customers any information which is in the
public domain.

(c) The Participating Lender agrees:

(i) to only distribute the Authorised Information in accordance with


all applicable laws; and

(ii) not to represent or imply that any other information or materials


distributed by it in connection with the Scheme, the Scheme
Documents or the affairs of NHFIC is Authorised Information.

(d) Each Participating Lender agrees to direct its Representatives,


attorneys, agents, officers, employees and contractors engaged in the
offer or processes relating to the Scheme not to give any information or
make any representation, in connection with the Scheme or any Scheme
Document, other than in accordance with the requirements, and in the
manner, specified in this clause 5.1.

5.2 Communications and marketing


(a) The Participating Lender must comply with the Media & Publicity Policy.

(b) The Participating Lender:

(i) must ensure that any written material (including website content
and any names or logos) placed in the public domain for the
purposes of publicising, promoting, explaining or recommending
the Scheme or any Scheme-Backed Loans is:

(A) in a form that is consistent in all material respects with


the Media & Publicity Policy; or

(B) in a form otherwise approved by NHFIC (such approval


not to be unreasonably withheld); and

(ii) other than as permitted under the Media & Publicity Policy, must
not release any external communications and/or marketing
materials relating to the Scheme or matters that are the subject
of the Scheme Documents without first obtaining NHFIC’s prior
written consent (such consent not to be unreasonably withheld).
For the avoidance of doubt, external communications includes
responding to media enquiries.

(c) Materials that are provided by the Participating Lender to NHFIC for
approval pursuant to clause 5.2(b) must allow for at least 5 Business

43259467_12 Participating Lender Deed 11


Days for NHFIC to review and respond as agreed by both parties.
Approval by NHFIC of any such materials may be given in general terms,
in relation to certain categories of written materials or in relation to
specific materials, and may be given subject to conditions.

(d) In conducting any general external communications or marketing in


connection with the Scheme, each party must use its best endeavours to
enhance the reputation of both parties in relation to their respective roles
under the Scheme and ensure that the status, integrity and reputation of
the parties and the Scheme are maintained.

6 Making and administering Scheme-Backed Loans


The Participating Lender is solely responsible for:

(a) managing all interactions with an Eligible Borrower in relation to


Scheme-Backed Loans made by it;

(b) preparing, administering and managing each Scheme-Backed Loan


made by it, as lender and mortgagee in respect of that loan; and

(c) managing arrears and taking enforcement action in respect of Scheme-


Backed Loans made by it and an Eligible Borrower that is in Default,

in each case, in accordance with all applicable Lender Policies.

7 Undertakings
7.1 Lending policies and practices
The Participating Lender must ensure that, when acting in connection with the
Scheme and throughout the process of originating, administering and managing
Scheme-Backed Loans (including its approach to arrears, collections, hardship
and enforcement), the Participating Lender and any third-party administrator
engaged by it:

(a) acts in accordance with the objective of the Scheme as set out the
Scheme Documents and the NHFIC Investment Mandate;

(b) complies with the Scheme Documents and the reasonable directions of
NHFIC made within the scope of the Scheme Documents;

(c) does not offer or provide a loan under the Scheme to a prospective
borrower unless the loan is an Eligible Loan;

(d) takes all reasonable steps to ensure that all Eligibility Criteria are or will
be able to be satisfied prior to making an Application and to collect
supporting documentation demonstrating compliance with those
Eligibility Criteria;

(e) notifies NHFIC promptly upon become aware of, or it has reasonable
grounds to suspect that, an Eligibility Criteria has not been, is not being
or will not be satisfied;

(f) uses reasonable endeavours to obtain customer consents required


under all applicable laws (including Privacy Laws) from any customer to
allow both parties to carry on such activities as contemplated in the
Scheme Documents;

43259467_12 Participating Lender Deed 12


(g) acts in accordance with the ordinary-course of business, lending, fraud,
arrears, collections, hardship and enforcement policies, practices and
procedures of the Participating Lender (including the policies, practices
and procedures which it would apply in the ordinary course of business
when originating, administering, structuring, managing, recovering
arrears or seeking recovery of any loan which is equivalent or similar to a
Scheme-Backed Loan), to the extent consistent with:

(i) the business, lending, fraud, arrears, collections, hardship and


enforcement policies, practices and procedures of a reasonable
and prudent mortgage lending organisation;

(ii) regulatory principles and standards applicable to it; and

(iii) good industry practice; and

(h) acts in a fair and equitable way and without distorting its normal
distribution of residential mortgage lending, or its approach to origination,
pricing, arrears, collections, hardships, enforcement, beyond the
changes that are necessary to meet the Scheme’s objectives.

If the Participating Lender engages another person to manage its arrears,


collections, hardship and/or enforcement operations, the Participating Lender
must procure that that person, in its approach to arrears, collections, hardship
and/or enforcement, does not treat Scheme-Backed Loans differently from those
which are not, except in circumstances where the treatment is more favourable to
the Eligible Borrower(s).

7.2 General undertakings


The Participating Lender undertakes and agrees:

(a) to observe, comply with and perform its obligations under, the Scheme
Documents (in its capacity as a Participating Lender) in force from time
to time, and to comply with any undertaking given by NHFIC in
connection with the issue of any Guarantee Certificate;

(b) to maintain and comply with the conditions of all authorisations, licences
and approvals required under all Relevant Laws for it to qualify as a
Participating Lender and to observe, comply with and perform its
obligations under, the Scheme Documents;

(c) to notify NHFIC promptly of any material change affecting any of the
representations, warranties, agreements and indemnities in this
document at any time and take such steps as may be reasonably
requested by NHFIC to remedy the same;

(d) on or immediately after the date on which it issues any press release or
make any public announcement or disclose any other event or
circumstance that is material in the context of the Scheme, to furnish
such information to NHFIC, and if furnished orally confirm such
information in writing;

(e) to comply at all times with:

(i) all Relevant Laws; and

(ii) all applicable Lender Policies.

43259467_12 Participating Lender Deed 13


8 Representations and warranties
(a) The Participating Lender represents and warrants to NHFIC that:

(i) it has power to enter into and has duly authorised the execution
and delivery of this document and that its obligations hereunder
constitute its legal, valid, binding and enforceable obligations;

(ii) it has the power to perform its obligations under the Scheme
Documents and its obligations thereunder constitute its legal,
valid, binding and enforceable obligations;

(iii) it has taken all necessary actions to authorise its entry into and
performance of this document and to carry out the transactions
contemplated hereunder and under the Scheme Documents;

(iv) that all Information:

(A) provided by it or on its behalf, to NHFIC, is true and


correct in all material respects and is not misleading or
deceptive in any material respect; and

(B) collected and held by it in connection with the Scheme


and the Scheme Documents will be stored and
protected in accordance with applicable law and
industry best practices;

(v) neither the execution and performance by it of this document nor


any transaction contemplated under the Scheme Documents will
contravene in any respect any provision of any law or any official
directive of a governmental agency of Australia (including the
Commonwealth and each State and Territory of Australia);

(vi) all authorisations, if any, required under the laws in force in


Australia (including the Commonwealth and each State and
Territory of Australia) in connection with the execution, delivery
or performance by it and the validity and enforceability of this
document and the transactions contemplated by the Scheme
Documents have been obtained or effected and are in full force
and effect;

(vii) it has a complaints handling mechanism sufficient to address


any complaints made by applicants and/or borrowers in relation
to the Scheme;

(viii) it will use all reasonable endeavours to assist NHFIC in it


operating the Scheme in a matter that seeks to fulfil the matters
set out in section 29K (“Principles for the operation of the
scheme”) of the NHFIC Investment Mandate;

(ix) except as otherwise disclosed to, and accepted by, NHFIC in


writing:

(A) there are no pending actions, suits or proceedings in


relation to its first home buyer lending business that are
likely to be determined adversely against it, and if so
determined, would individually or in the aggregate have
a material adverse effect and, no such actions, suits or
proceedings are threatened or contemplated; and

43259467_12 Participating Lender Deed 14


(B) it is not currently the subject of any investigation,
enquiry or review by a regulator in Australia in relation
to its residential mortgage lending business; and

(x) in respect of each loan that is, or for which an Application is


submitted for it to be approved as, a Scheme-Backed Loan, it
has undertaken the Verification Requirements and it is not
aware, nor does it have a reason to suspect, that an Eligibility
Criteria has not been, or will not be, satisfied as at the date of
issuance of the Guarantee Certificate.

(b) The representations and warranties in this clause 8 are taken to be


made by the Participating Lender, with respect to the facts and
circumstances then subsisting, on the date of each issue of a Guarantee
Certificate.

9 Indemnity
The Participating Lender agrees to indemnify and hold harmless NHFIC from and
against all actions, proceedings, liabilities, claims, charges, damages and Costs
arising because or in connection with:

(a) a breach by it of a Scheme Document;

(b) any breach or alleged breach of any representation or warranty made or


taken to be made by it, or the breach or alleged breach of any
agreement, covenant or undertaking by it contained in this document;

(c) any untrue or misleading statement or allegedly untrue or misleading


statement of a material fact; or

(d) any failure by it (including by any of its Representatives) to comply with:

(i) any Relevant Law; or

(ii) any Lender Policies,

except to the extent that the Participating Lender shall not be liable under this
clause 9 for any such loss arising from (1) any failure by NHFIC to comply with
Privacy Laws or any fraud or wilful misconduct by NHFIC, or (2) the distribution
by it of Authorised Information (which NHFIC has not otherwise notified the
Participating Lender should not be distributed) containing any misleading or
deceptive (or allegedly misleading or deceptive) statement or omission.

10 Suspension Events
10.1 Suspension Events
It is a Suspension Event if:

(a) upon receipt of a Material Policy Change Report (as required under Rule
5.1(c) (“Information and reporting requirements”) of the Scheme Rules),
NHFIC considers the change to be materially adverse to NHFIC, the
Commonwealth or the interests of the Scheme and NHFIC has notified
the Participating Lender in writing that it is a Suspension Event;

(b) following any recommendations provided by NHFIC to the Participating


Lender under Rule 6 (“Audit”) of the Scheme Rules it is discovered (by a
further Spot Check or otherwise) that remedial action has not been

43259467_12 Participating Lender Deed 15


implemented by the Participating Lender or that further instances of non-
compliance are occurring, and NHFIC has notified the Participating
Lender in writing that it is a Suspension Event;

(c) in NHFIC’s opinion, it is necessary or desirable to suspend operation of


the Scheme and NHFIC has notified the Participating Lender in writing
that it is a Suspension Event;

(d) the Participating Lender fails to perform or observe any of its obligations
under Scheme Documents where such failure is material (in the opinion
of NHFIC, acting reasonably) and NHFIC has notified the Participating
Lender in writing that it is a Suspension Event;

(e) the Participating Lender has, or may have, committed serious or


persistent breaches of any Relevant Laws; and

(f) either ASIC or APRA has notified NHFIC that in its opinion and having
regard to its statutory objective the Participating Lender’s participation in
the Scheme should be suspended.

10.2 Consequences of a Suspension Event


If a Suspension Event occurs:

(a) the Participating Lender’s rights to apply for a Scheme Place and/or the
issue of any Guarantee Certificates are immediately suspended; and

(b) except in the case of clause 10.1(f) (“Suspension Events”):

(i) NHFIC may convene, upon reasonable notice, a meeting with


representatives of the Participating Lender and the Participating
Lender shall send an appropriate representative to such a
meeting, at which the Participating Lender and NHFIC will use
their best endeavours to agree a plan of action to address any
outstanding matters arising from the Suspension Event;

(ii) in the event that mutual agreement between the Participating


Lender and NHFIC to resolve any outstanding matters cannot be
achieved having followed the above process, NHFIC shall give
10 Business Days written notice to the Participating Lender to
comply with NHFIC’s recommendations; and

(iii) if no such agreement is reached, NHFIC may, by written notice


to the Participating Lender:

(A) revoke the Participating Lender’s approval as an


“eligible lender” under the Scheme; and/or

(B) terminate this document under clause 12.1(a)(i)


(“Termination by NHFIC”).

11 Force Majeure
(a) Neither party is liable to the other if it fails to perform or comply with its
obligations under a Scheme Document to the extent that it is prevented
from performing or complying with such obligation by a Force Majeure
Event.

43259467_12 Participating Lender Deed 16


(b) Notwithstanding any other provision of a Scheme Document, if either
party fails to perform or comply with its obligations under a Scheme
Document because of a Force Majeure Event, that party must:

(i) immediately notify the other party of the reason for, and the
effect of, the failure; and

(ii) use all reasonable efforts to mitigate, avoid and remove the
Force Majeure Event and perform and comply with any affected
obligations as soon as possible.

12 Termination
12.1 Termination by NHFIC
NHFIC may terminate the Offer Provisions:

(a) immediately:

(i) in the circumstances described in clause 10.2(b)(iii)


(“Consequences of a Suspension Event”);

(ii) if an Insolvency Event has occurred, or is likely to occur, in


relation to the Participating Lender;

(iii) if:

(A) an Australian Credit Licence held by the Participating


Lender is terminated or is revoked by ASIC; or

(B) either ASIC or APRA has notified NHFIC that in its


opinion and having regard to its statutory objective the
Participating Lender’s participation in the Scheme
should be terminated; or

(iv) at any time by giving the Participating Lender 60 days prior


written notice.

12.2 Termination by Lender


The Participating Lender may terminate the Offer Provisions at any time by giving
NHFIC at least 30 days’ prior written notice.

12.3 Effect of Termination


Except as expressly provided under the Scheme Rules:

(a) termination of the Offer Provisions does not, in any away, affect any
accrued rights, titles or interests of either party arising on or before the
date of termination;

(b) any Scheme Places and Guarantee Certificates issued on or prior to the
date of termination continue to be valid after such termination in
accordance with their terms; and

(c) the obligations of the Participating Lender to continue to provide the


Periodic Loan Data in accordance with the Scheme Rules.

43259467_12 Participating Lender Deed 17


12.4 Transition out arrangements
Except as otherwise required by applicable law and the Participating Lender’s
reasonable commercial record keeping requirements, the Participating Lender
must, and must cause its Representatives to, immediately following expiry or
earlier termination of this document, return to NHFIC, or, if expressly required by
NHFIC, destroy (at NHFIC’s discretion and in the manner reasonably specified
by NHFIC), all:

(a) confidential information of NHFIC;

(b) Scheme Materials; and

(c) other tangible property and materials of NHFIC,

which is or are in the possession, custody or control of the Participating Lender, a


Representative or either of them as at the date of termination and which the
Participating Lender is not expressly entitled, in accordance with the terms of this
document, to retain following such expiry or termination.

13 Disputes
13.1 Negotiation of Disputes
(a) A party (Initiating Party) claiming that a Dispute has arisen must give
the other party (Recipient Party) a notice setting out brief details of the
Dispute (Dispute Notice). Within 20 Business Days of service of a
Dispute Notice, the Recipient Party must give the Initiating Party a notice
setting out brief details of the Recipient Party’s position on the Dispute
(Reply Notice).

(b) If Dispute and Reply Notices are given, the parties must make
representatives with authority to settle the Dispute available for the
purpose of meeting in an effort to resolve the Dispute. At least one
meeting of the authorised representatives must take place within 5
Business Days of service of a Reply Notice.

(c) If the authorised representatives are unable to resolve the Dispute within
20 Business Days after date of the Reply Notice, the Initiating Party will
be entitled to elect to proceed immediately with resolving the Dispute in
accordance with the remainder of this clause or commence proceedings
regarding the Dispute.

(d) If the Recipient Party does not give a Reply Notice or make its
authorised representatives available for a meeting within the time
periods contained in this clause, the Initiating Party will be entitled to
elect either to proceed immediately with resolving the Dispute in
accordance with the remainder of this clause or commence proceedings
regarding the Dispute.

13.2 Independent Expert


(a) If the Dispute is not resolved in accordance with clause 13.1
(“Negotiation of Disputes”), the Dispute may proceed to and be finally
resolved by the appointment of an independent expert (the Independent
Expert) to determine the Dispute. The Independent Expert shall act as
an expert and not as an arbitrator.

(b) The Initiating Party and Recipient Party must agree on the appointment
of an Independent Expert. If the parties do not agree on the

43259467_12 Participating Lender Deed 18


Independent Expert to be appointed within 5 Business Days of the
Dispute proceeding to determination by an Independent Expert, the
Initiating Party may apply to the president for the time being of the
Institute of Chartered Accountants in Australia to make the appointment.

(c) Each party shall make such written and/or oral submissions to the
Independent Expert, and shall provide any documents or information, as
the Independent Expert may require to determine the dispute based on
his or her own skill, judgement and experience.

(d) The parties agree:

(i) that an Independent Expert appointed in accordance with this


clause must (unless the parties agree otherwise) have relevant
expertise and qualifications in the subject area of the Dispute;

(ii) to request the Independent Expert to make their determination


within 20 Business Days after the Dispute was referred to the
Independent Expert for determination;

(iii) unless the parties otherwise agree in writing or until the Dispute
is determined by the Independent Expert, the parties are obliged
to fulfil their obligations under the Scheme Documents; and

(iv) the Costs of appointing any Independent Expert will be shared


equally between them.

14 Notices in relation to the Scheme Documents


All notices, certificates, demands, consents, approvals, waivers and other
communications required to be provided in connection with a Scheme Document:

(a) must be in the form and delivered as required by the Scheme Document;
or

(b) if the Scheme Document does not include such provisions:

(i) must:

(A) be made in writing; and

(B) either be:

(aa) where supported by the Scheme Portal,


submitted, published or otherwise made
available via the Scheme Portal; or

(ab) where the Scheme Portal does not support


such delivery, delivered by hand, prepaid post
or email to the address (as appropriate) as
notified to the sender by the recipient from time
to time;

(C) signed by or sent from the email account of an


Authorised Person of the sender; and

(D) marked for attention in the way notified to the sender by


the recipient from time to time; and

43259467_12 Participating Lender Deed 19


(ii) will take effect from the time they are received unless a later
time is specified in them, where:

(A) if submitted, published or otherwise made available via


the Scheme Portal, are taken to be received on the date
they are so submitted, published or made available;

(B) if sent by post, are taken to be received 3 Business


Days after posting (or 5 Business Days after posting if
sent across international boundaries);

(C) if sent by email, are taken to be received when the


email is dispatched by the sender to each of the email
addresses specified by the recipient, unless, for each of
the addresses, the sender receives an automatic
notification that the email has not been received (other
than an out of office greeting for the named addressee)
and it receives the notification before 2 hours after
dispatch; or

(D) if given by hand, are taken to be received at the time of


delivery,

(c) and, in all cases, if they are received after 5.00pm in the place of receipt
or on a non-Business Day, they are taken to be received at 9.00am on
the next Business Day.

15 Confidentiality & privacy


15.1 No disclosure
NHFIC and the Participating Lender agrees not to disclose information provided
by the other party (including information in connection with the other party’s
business affairs and/or the existence or contents of a Scheme Document) that it
or its Representatives obtain in connection with the Scheme Documents or the
negotiations leading up to them (Confidential Information) except:

(a) information that is publicly available other than through a breach of any
confidentiality obligation owed by that party;

(b) to its officers, employees, agents, contractors, legal and other advisers
and auditors provided the recipient either agrees to act consistently with
this clause or is under professional obligation to keep the information
confidential;

(c) to a related body corporate provided the recipient agrees to act


consistently with this clause;

(d) with the consent of the party who provided the information; or

(e) any disclosure the disclosing party reasonably believes is required by


any law, securities exchange or rating agency.

15.2 Disclosure by NHFIC


Clause 15.1 (“No disclosure”) does not prevent NHFIC or its officers disclosing
Confidential Information:

(a) to a House or Committee of the Parliament of the Commonwealth;

43259467_12 Participating Lender Deed 20


(b) on a confidential basis, to any minister of the Crown, any Australian
government department, agency or authority, ASIC, APRA or any other
governmental, banking, taxation or regulatory agency or authority; or

(c) for the purpose of reporting on the establishment, performance or


operation of, or compliance with, the Scheme.

15.3 Privacy
(a) The Participating Lender must comply, and must ensure that its
Representatives, contractors, officers and employees, comply with all
Privacy Laws to the extent that such persons are required to do so by
law.

(b) Without limiting its obligations under clause 15.3(a), the Participating
Lender agrees, and must ensure that its Representatives and
contractors agree (so far as applicable):

(i) not to do any act, or engage in any practice, that would breach a
Privacy Law, or which if done or engaged in by NHFIC, would be
a breach of a Privacy Law;

(ii) to notify NHFIC immediately upon becoming aware of a breach


or possible breach of any of the obligations contained in or
referred to in this clause 15.3;

(iii) to ensure that any person who is required to deal with personal
information and/or health information for the purposes of the
Scheme Documents on its behalf is made aware of the
obligations in this clause 15.3; and

(iv) to ensure that as part of the privacy statement it provides to


Eligible Borrowers in the loan Application form, it notifies Eligible
Borrowers that their personal information may be provided to:

(A) NHFIC for the purpose of the Participating Lender


meeting its reporting requirements under this document;
and

(B) NHFIC and/or the Commonwealth for the purpose of


overseeing, managing and conducting any further
investigations it may require in relation to the Scheme.

16 Outsourcing
(a) NHFIC may outsource any aspect of the administration of its rights and
obligations under the Scheme Documents to another person (each an
Outsource Provider) by providing written notice to the Participating
Lender.

(b) The Participating Lender agrees that it shall, and shall procure that each
of its Representatives shall, co-operate fully with any Outsource Provider
(to the extent required) in relation to such administration.

(c) NHFIC accepts responsibility for the acts and omissions of each
Outsource Provider appointed by it as though they were NHFIC’s own
acts and omissions, and shall procure that each Outsource Provider
appointed by it complies with the obligations under the Scheme
Documents expressed to be applicable to NHFIC.

43259467_12 Participating Lender Deed 21


17 Dealing with interests
17.1 No assignments or novation by Participating Lender
The Participating Lender may not assign any of its rights or novate any of its
rights or obligations under this document without NHFIC’s prior written consent.

17.2 Assignments and novations by NHFIC


NHFIC may assign any of its rights or novate any of its rights and obligations
under the Scheme Documents:

(a) without any further action or consent required of the Participating Lender
(with consent deemed to have been provided) where the assignment or
novation is to:

(i) a wholly-owned subsidiary of NHFIC; or

(ii) a Commonwealth Entity; or

(b) otherwise, only with the Participating Lender’s prior written consent
(which must not be unreasonably withheld or delayed or subject to
unreasonable conditions).

18 General
18.1 Amendments
Without limiting clause 3.2 (“Changes to Appointment Terms”), any term of this
document may only be amended in writing signed by the parties.

18.2 Compliance with policies and audit requirements


(a) The Participating Lender will perform and comply with its obligations
under the Scheme Documents in accordance with any policies or
instructions of NHFIC in relation to the compliance of NHFIC with:

(i) the NHFIC Act and the NHFIC Investment Mandate;

(ii) the Finance Law;

(iii) the Freedom of Information Act 1982 (Cth);

(iv) the Archives Act 1983 (Cth);

(v) the Privacy Act 1988 (Cth); and

(vi) other relevant laws or Commonwealth policies,

including, without limitation, to provide access and assistance in relation


to any requests or requirements of NHFIC, the Australian National Audit
Office and/or the Auditor-General of Australia.

(b) NHFIC will:

(i) consult with Participating Lender before approving any policy or


instruction that substantially affects the Participating Lender’s
performance or compliance with obligations under the Scheme
Documents; and

43259467_12 Participating Lender Deed 22


(ii) provide the Participating Lender with a copy of any instruction,
policy or request required to be complied with under clause
18.2(a).

18.3 Compliance with NHFIC Act


Nothing in this document requires NHFIC to contravene the NHFIC Act, the
NHFIC Investment Mandate nor any other law in the performance and
compliance by it of its obligations under the Scheme Documents.

18.4 Work Health and Safety


Each party:

(a) will, where applicable, comply with, and ensure that all subcontractors
comply with, their respective obligations under the WHS Legislation
including to, so far as is reasonably practicable, consult, co-operate and
co-ordinate activities with one another and/or any Representatives and
contractors (as the case may be) and any other person who,
concurrently with either party and/or any Representative or contractor
(as the case may be), has a work health and safety duty under the WHS
Legislation in relation to the same matter; and

(b) acknowledges that it has a duty under the applicable WHS Legislation to
ensure, so far as is reasonably practicable, the health and safety of:

(i) NHFIC personnel;

(ii) the Participating Lender’s personnel;

(iii) any Representative or contractor personnel; and

(iv) other persons,

as the case may be, in connection with the Scheme Documents.

18.5 No reliance
The Participating Lender acknowledges and agrees that it has not relied on any
information or any representation from any person in respect of the Scheme
which is not contained in, or consistent with, that as set out in the Scheme
Documents.

18.6 Waivers and discretions


(a) A Power created by any Scheme Document cannot be waived except in
writing signed by the party entitled to that Power. A waiver (either wholly
or in part) by a party of a Power will not operate as a subsequent waiver
of the same Power or of any other Power of that party.

(b) NHFIC may exercise a Power or give or refuse its consent, approval or a
waiver in connection with a Scheme Document in its absolute discretion
(including by imposing conditions). A single or partial exercise of any
Power by NHFIC does not prevent a further exercise of that or of any
other Power.

(c) No failure to exercise, nor any delay in exercising, on the part of NHFIC,
any Power under this document or a Scheme Document shall operate as
a waiver of any such Power or constitute an election to affirm any of the
Scheme Documents.

43259467_12 Participating Lender Deed 23


18.7 Conduct of business by NHFIC
No provision of a Scheme Document will:

(a) interfere with the right of NHFIC to arrange its affairs in whatever manner
it thinks fit;

(b) oblige NHFIC to investigate or claim any credit, relief, remission or


repayment available to it or the extent, order and manner of any claim; or

(c) oblige NHFIC to disclose any Information or computations relating to its


affairs.

18.8 Costs
Any Costs incurred by the Participating Lender in connection with it entering into,
performing and complying with its obligations under the Scheme Documents will
be for the Participating Lender’s own account.

18.9 Further assurances


The Participating Lender will promptly execute all documents and do everything
necessary or desirable to give full effect to the arrangements contained in the
Scheme Documents.

18.10 Partial invalidity


If, at any time, any provision of a Scheme Document is or becomes illegal, invalid
or unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the legality,
validity or enforceability of such provision under the law of any other jurisdiction
will in any way be affected or impaired.

18.11 Indemnities and reimbursement


(a) To the extent permitted by law, the operation of any legislative
proportionate liability regime is excluded in relation to any claim against
the Participating Lender under or in connection with indemnity
obligations under this document.

(b) All indemnities and reimbursement obligations (and any other payment
obligations of the Scheme Participant) in a Scheme Document are
continuing and survive termination of the Scheme Document, and
cancellation or termination of the Guarantee Certificates.

18.12 Governing law and jurisdiction


(a) This document is governed by the laws of New South Wales.

(b) The courts having jurisdiction in New South Wales have non-exclusive
jurisdiction to settle any dispute arising out of or in connection with this
document (including a dispute relating to the existence, validity or
termination of a Scheme Document).

(c) Notwithstanding clause 18.12(b), NHFIC shall not be prevented from


taking proceedings relating to a dispute in any other courts with
jurisdiction. To the extent allowed by law, NHFIC may take concurrent
proceedings in any number of jurisdictions.

EXECUTED as a deed

43259467_12 Participating Lender Deed 24


Participating Lender Deed
Schedule Appointment Terms

Part 1 – Standard Terms

Authorised Person An officer performing the role of [insert position title or role
(Participating Lender) description] or any other officer nominated by the
Participating Lender and notified to NHFIC in writing.

Business Day [No additional places specified / specify additional Business


Day centres].

Commencement Date [1 January 2020 / [insert date]] or the date of this


document, whichever occurs later.

Lender Designation [Major Bank / Non-Major Bank Lender].

Part 2 – Operational Terms

Lender Policies [Specify all Participating Lender policies and procedures


(as titled and dated documents, and which may be
attached to this document) that are to be complied with –
including any credit lending, responsible lending, arrears
management, hardship and enforcement policies]

Media & Publicity Policy [[“Media & Publicity Policy for Participating Lenders”
(Version 1.0)] dated [●] issued by NHFIC.]

[Note – this document will also address use of logos and


Scheme Materials]

Nominated Brands [Specify each division name, brand or trading name of the
Participating Lender that will represent the Participating
Lender in the offer of Scheme-Backed Loans]

Scheme Materials [Specify Scheme disclosure and consent materials as


issued by NHFIC and provided to the Participating Lender]

Scheme Place Allocation [Note – section 29I of the NHFIC Investment Mandate and
Rule 2.1 of the Scheme Rules establish limits on
allocations of Scheme Places, with the application of any
quotas (individual, global or as a combination of both) for
allocations of Scheme Places a feature to be determined
throughout the Participating Lender procurement process.
The final determination on the application of quotas will be
made by NHFIC (in its absolute discretion).]

Scheme Portal User [“Scheme Portal User Manual” (Version 1.0)] dated [●]
Manual issued by NHFIC.]

43259467_12 Participating Lender Deed 25


Participating Lender Deed
Signing page

NHFIC / Participating Lender(s)

[Execution blocks will be inserted]

43259467_12 Participating Lender Deed 26


First Home Loan Deposit Scheme
Template Document

Scheme Rules

What is this document usually Scheme Rules.


called?

Who is it issued by? National Housing Finance and Investment Corporation (NHFIC).

What does it do? Establishes certain capacity, participation and eligibility criteria for the
Scheme, and may be updated from time to time for developments in the
Scheme.

What matters does it cover? - Scheme commencement, lender participation and Scheme capacity.
- Eligibility criteria for borrowers, loans and properties.
- Allocations and procedures for Scheme places and the issue of
Guarantee Certificates.
- Ongoing reporting and audit.

What other documents are closely - Participating Lender Deed – provides an overall framework for the
related to it? appointment by NHFIC of each lender (Participating Lender) to, and
for the conduct and performance by that Participating Lender of
activities in connection with, the Scheme.

- Deed of Guarantee – provides for a contractual guarantee to be made


by NHFIC in favour of Participating Lenders who have funded eligible
loans under the Scheme.

Why is this template document This template document is provided for the purposes of the Request for
available? Proposal (RFP) released on 28 October 2019 and issued by NHFIC in
connection with the Scheme.
Respondents to the RFP are advised that NHFIC will be responsible for
the finalisation of the Scheme Rules, and this template document is
intended to be used as the basis for informing lenders’ responses to the
RFP.
This document is provided in draft and will be finalised as part of a
document package available to those lenders selected by NHFIC to form
part of the panel arrangement and administer the Scheme.
First Home Loan Deposit Scheme

Scheme Rules
Dated [1 January 2020]

National Housing Finance and Investment Corporation


Scheme Rules

Contents

Contents i
General terms 1

1 Interpretation 1
1.1 Commencement 1
1.2 Definitions 1
1.3 General interpretation 7

2 The Scheme 8
2.1 Scheme limit 8
2.2 Scheme-Backed Loans 8
2.3 The Guarantee 8

3 Eligibility Criteria 8
3.1 Overarching requirement 8
3.2 Eligible Borrowers 8
3.3 Eligible Loans 9
3.4 Eligible Property 10
3.5 Verification Requirements 10
3.6 Non-satisfaction of Eligibility Criteria 10

4 Scheme Places 11
4.1 Lender Designations 11
4.2 Scheme Place allocations 11
4.3 Reserve & Pre-Approval Applications 11
4.4 Guarantee Certificate Applications 12
4.5 General provisions for Applications 13
4.6 Issuance of Guarantee Certificates 13
4.7 Variation, cancellation and re-issue of Guarantee Certificates 13

5 Reporting 14
5.1 Information and reporting requirements 14
5.2 Notice of certain matters 14
5.3 Erroneous information 15

6 Audit 15
6.1 Internal Audits 15
6.2 Spot Checks 16
6.3 General 17

7 Scheme Portal 17

8 Refinancing of Scheme-Backed Loans 18

9 Transfers of Scheme-Backed Loans 18


9.1 Permitted Transfers 18
9.2 Mortgaged-backed funding arrangements 19

44168514_15 Scheme Rules i


Current as at [1 January 2020]
Scheme Rules

10 Claims Procedures 19
10.1 When Claims may be made 19
10.2 Monthly accounts and remittances for Claims 20
10.3 Payments in respect of valid Claims 21
10.4 Clawback of Claim payments 21

11 Changes to these Scheme Rules 22


11.1 Changes to these Rules by NHFIC 22
11.2 Changes required by the Federal Government 22
11.3 Date amendment or supplement becomes effective 22

12 Notices in relation to the Scheme Documents 22

13 General 23
13.1 Governing law and jurisdiction 23
13.2 Compliance with laws 24
Schedule 1 Price Cap Area Identification Schedule 25
Schedule 2 Required Information 27
Schedule 3 Verification Requirements 28
Schedule 4 Regular Reporting Requirements 29

44168514_15 Scheme Rules ii


Current as at [1 January 2020]
Scheme Rules
General terms

1 Interpretation
1.1 Commencement
These Scheme Rules commence on [1 January 2020].

1.2 Definitions
Unless the contrary intention appears, in this document these terms have the
following meanings:

Application means each Reserve Application, Pre-Approval Application and


Guarantee Certificate Application (as the context admits).

Application Information means all of the information, documents and materials


specified:

(a) for any Reserve Application, in Part 1 of Schedule 2 (“Required


Information”);

(b) for any Pre-Approval Application, in Part 2 of Schedule 2; and

(c) for a Guarantee Certificate Application that relates to:

(i) any new Scheme-Backed Loan, in Part 3 of Schedule 2; and

(ii) any Scheme-Backed Loan to be refinanced, in Part 4 of


Schedule 2.

ASIC means the Australian Securities and Investments Commission.

Australian Credit Licence has the meaning given to that term for the purposes
of the NCCP.

Borrower Couple means 2 people who are each a spouse or de facto partner of
the other and who, together, apply for a Scheme-Backed Loan as the borrowers
of record.

Borrower Declaration means a statutory declaration made by each borrower


which includes declarations as to the matters set out in Part 2 of the Schedule 3
(“Verification Requirements”).

Borrower Hardship means, in relation to a borrower and a Participating Lender,


circumstances of financial or other hardship for the borrower, as recognised
under Relevant Law or Lender Policies, that may affect the borrower’s ability to
service a relevant Scheme-Backed Loan and where the Participating Lender is
required to assist the borrower as part of a forbearance process.

Business Day means a day (excluding Saturday and Sunday) on which banks
are generally open in Sydney.

Claim means a valid claim made by a Participating Lender in respect of a


Guaranteed Liability in accordance with the Claims Procedures.

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Current as at 1 January 2010
Claims Procedures means the procedures set out in Rule 10 (“Claims
Procedures”).

Commencement Date means, in relation to a Participating Lender, the later of


1 January 2020 and such other date so designated in the applicable Participating
Lender Deed entered into between NHFIC and that Participating Lender.

Commonwealth means the Commonwealth of Australia.

Committed Amount means, in relation to an Eligible Loan, the total principal


amount of the loan(s) that is committed (whether conditionally or unconditionally)
to be advanced by the Participating Lender to the Eligible Borrower(s).

Corporations Act means the Corporations Act 2001 (Cth).

Default means, in relation to a Scheme-Backed Loan, where that Scheme-


Backed Loan becomes a Non-Performing Loan.

Disposal Event means, in relation to any mortgaged property securing a


Scheme-Backed Loan, the mortgaged property being sold to an arm’s length
purchaser on arm’s length terms by the Participating Lender or pursuant to a
voluntary sale.

Eligibility Criteria means the requirements for persons to be Eligible Borrowers,


loans to be Eligible Loans and Residential Property to be Eligible Property, in
each case, for the purposes of the Scheme.

Eligible Borrower has the meaning given in Rule 3.2 (“Eligible Borrowers”).

Eligible Loan has the meaning given in Rule 3.3 (“Eligible Loans”).

Eligible Property has the meaning given in Rule 3.4 (“Eligible Property”).

Enforcement means:

(a) a Disposal Event has occurred; and

(b) all amounts available to the Participating Lender for such purposes have
been applied towards payment of amounts owing under the Non-
Performing Loan.

Established Dwelling means a Residential Property which:

(a) may be legally occupied as at the Loan Settlement Date; and

(b) is acquired under a contract of sale dated no earlier than 1 January


2020.

Financial Half-Year means each period of 6 months commencing on 1 January


and ending on 30 June or commencing on 1 July and ending on 31 December, in
each case in the same calendar year.

Financial Year means each period of 12 months commencing on 1 July in a


calendar year and ending on 30 June in the following calendar year, provided
that the first Financial Year applicable to the Scheme commences on 1 January
2020 and ends on 30 June 2020.

Guarantee means the Deed of Guarantee in respect of the First Home Loan
Deposit Scheme made by NHFIC in favour of Participating Lenders effective from
[1 January 2020].

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Current as at [1 January 2020]
Guarantee Certificate means a certificate issued by NHFIC in accordance with
the Guarantee and these Rules to evidence registration of a Scheme-Backed
Loan under the Guarantee.

Guarantee Certificate Application has the meaning given in Rule 4.4(a)


(“Guarantee Certificate Applications”).

Guaranteed Liability has the meaning given in the Guarantee.

Guaranteed Maximum Liability has the meaning given in the Guarantee.

House and Land Package means a house and land package relating to
Residential Property where the relevant sale and building contracts entered into
by the Eligible Borrower:

(a) are dated no earlier than 1 January 2020 and are entered into before the
Loan Settlement Date; and

(b) in respect of any building contract, requires the builder to commence


construction within 26 weeks of the Loan Settlement Date and complete
construction and procure the issuance of an occupancy certificate within
15 months of the Loan Settlement Date.

Individual Borrower means a person who, individually, applies for a Scheme


Backed-Loan as the sole borrower of record.

Information means all information, regardless of its form (including any form
(whether visible or not) of storage from which the information can be reproduced
and any form in which the information is embodied or encoded), relating to or
developed in connection with the Scheme and the Scheme Documents,
including, in the case of an Eligible Borrower, all information provided in any
Application materials to a Participating Lender and made available to NHFIC at
any time before, on or after the date of these Rules.

Internal Audit has the meaning given in Rule 6.1(a) (“Internal Audits”).

Land and Separate Contract to Build Home means a land and separate
contract to build a home relating to Residential Property where, prior to the Loan
Settlement Date, the Eligible Borrower has:

(a) acquired the relevant land under a contract dated no earlier than
1 January 2020; and

(b) entered into a building contract dated no earlier than 1 January 2020
which requires the builder to commence construction within 26 weeks of
the Loan Settlement Date and complete construction and procure the
issuance of an occupancy certificate within 15 months of the Loan
Settlement Date.

Lender Policies means, in relation to a Participating Lender, the relevant


policies of that Participating Lender designated as such under the applicable
Participating Lender Deed.

Lending Policy Questionnaire means, in relation to a Participating Lender, the


questions and information set out in Part 2 of Schedule 4 (“Reporting
Requirements”).

Loan Settlement Date means, for the acquisition of an Eligible Property that is:

44168514_15 Scheme Rules 3


Current as at [1 January 2020]
(a) an Established Dwelling or a New-Build Dwelling under an Off-the-Plan
Arrangement, the date on which the loan is drawn to acquire that
property; or

(b) a New-Build Dwelling under either a House and Land Package or a Land
and Separate Contract to Build Home, the first date on which funds are
advanced under the loan in connection with that arrangement.

Major Bank means each “major bank” as defined in the NHFIC Investment
Mandate.

Material Policy Change Report has the meaning given in Rule 5.1(b)
(“Information and reporting requirements”).

Minister has the meaning given to that term for the purposes of the NHFIC Act.

NCCP means the National Consumer Credit Protection Act 2009 (Cth), including
the National Credit Code annexed to that Act.

NCCP Regulations means the National Consumer Credit Protection Regulations


2010 (Cth).

New-Build Dwelling means a Residential Property that is to be newly


constructed as part of:

(a) a House and Land Package; or

(b) a Land and Separate Contract to Build Home,

and, in each case, which is unable to be legally occupied as at the Loan


Settlement Date; or

(c) an Off-the-Plan Arrangement.

NHFIC means National Housing Finance and Investment Corporation (ABN 22


498 714 570).

NHFIC Act means the National Housing Finance and Investment Corporation Act
2018 (Cth).

NHFIC Investment Mandate means the National Housing Finance and


Investment Corporation Investment Mandate Direction 2018 (Cth).

Non-Major Bank Lender means each person designated as a Non-Major Bank


Lender under a Participating Lender Deed.

Non-Performing Loan means a Scheme-Backed Loan:

(a) for which:

(i) at least 90 days has elapsed since the date an amount was first
due under the terms and conditions of the loan but was unpaid;
and

(ii) the total amount unpaid and in arrears under the loan (including
all fees and any charges due but unpaid as a result of missed
payments) equals at least 90 days’ worth of scheduled
payments under the terms and conditions of the loan; or

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Current as at [1 January 2020]
(b) for which the Participating Lender considers that there is doubt as to
whether payment in full of amounts contracted to be paid under the terms
and conditions of the loan will be achieved in a timely manner,

and, in either case, in connection with which the Participating Lender:

(c) takes possession of the mortgaged property securing that loan (whether
by repossession, voluntary repossession or abandonment); or

(d) has initiated a Disposal Event.

Off-the-Plan Arrangement means an ‘off-the-plan’ arrangement for the


acquisition of Residential Property, provided that:

(a) the contract of sale is dated no earlier than 1 January 2020 and is
entered into before the Loan Settlement Date; and

(b) the Loan Settlement Date will occur within 90 days of the date of a
Guarantee Certificate being issued under the Scheme.

Participating Lender means each person who:

(a) is a credit provider (as defined in the National Credit Code) who is
appropriately licensed under all Relevant Laws to engage in the credit
activity of providing residential mortgage loans in Australia or is exempt
under such Relevant Laws from such licensing requirements;

(b) is approved in writing by NHFIC as an eligible lender for a Financial Year


for the purposes of section 29B (“Eligible lender”) of the NHFIC
Investment Mandate; and

(c) has entered into a Participating Lender Deed that has not been
terminated.

Participating Lender Deed means a deed under which NHFIC approves a


person as an eligible lender for the purposes of section 29B (“Eligible lender”) of
the NHFIC Investment Mandate and appoints that person as a “Participating
Lender” for the purposes of the Scheme.

Periodic Loan Data means the information set out in Part 1 of Schedule 4
(“Regular Reporting Requirements”).

Permitted Transfer means, in relation to a Scheme-Backed Loan, an


assignment or transfer of that Scheme-Backed Loan made in accordance with
Rule 9 (“Transfers of Scheme-Backed Loans”).

Pre-Approval Application has the meaning given in Rule 4.3(a)(ii) (“Reserve &
Pre-Approval Applications”).

Price Cap Area Identification Schedule means Schedule 1 (“Price Cap Area
Identification”) to these Scheme Rules.

Quarter means each period of 3 months ending on 31 March, 30 June, 30


September or 31 December in each year.

Relevant Laws means all laws relating to consumer credit, including:

(a) the NCCP;

(b) the National Consumer Credit Protection (Fees) Act 2009 (Cth);

44168514_15 Scheme Rules 5


Current as at [1 January 2020]
(c) the National Consumer Credit Protection Amendment Act 2010 (Cth);

(d) any legislation enacted in connection with any of the Acts set out in
paragraphs (a) to (c) of this definition, the NCCP Regulations and any
other regulations made under any of the Acts set out in paragraphs (a) to
(c) of this definition;

(e) Division 2 of Part 2 of the Australian Securities and Investments


Commission Act 2001 (Cth), and regulations made for the purpose of
that Division, so far as it relates to the obligations in respect of an
Australian Credit Licence issued under the NCCP; and

(f) any other Commonwealth, State or Territory law that covers conduct
relating to credit activities (whether or not it also covers other conduct),
but only insofar as it covers conduct relating to credit activities.

Representative means, in relation to a Participating Lender, any third-party


broker or other person that is authorised by the Participating Lender in writing to
offer Scheme-Backed Loans on its behalf.

Reserve Application has the meaning given in Rule 4.3(a)(i) (“Reserve & Pre-
Approval Applications”).

Residential Property has the same meaning as given to the term “residential
property” in the NCCP.

Scheme means the Australian Government’s First Home Loan Deposit Scheme,
established by NHFIC in accordance with the NHFIC Act and the NHFIC
Investment Mandate.

Scheme-Backed Loan means an Eligible Loan that is made by a Participating


Lender in accordance with the Scheme Documents in respect of which NHFIC
has issued a Guarantee Certificate.

Scheme Documents means:

(a) these Rules;

(b) the Guarantee; and

(c) as between NHFIC and a Participating Lender, the Participating Lender


Deed entered into by that Participating Lender.

Scheme Place means a reservation for a Guarantee Certificate that may be


issued under the Scheme.

Scheme Portal means the website administered by NHFIC at


[www.nhfic.gov.au/FHLDS] and/or any other internet site, portal or data or
communication system or method designated as such by NHFIC from time to
time in relation to the administration of the Scheme.

Scheme Portal User Manual means the manual published by NHFIC in relation
to the Scheme Portal.

Specified Rate means, in respect of any overdue amount and for each day that
such amount remains unpaid (inclusive of the day on which it is paid), the
general interest charge rate as determined in accordance with section 8AAD of
the Taxation Administration Act 1953 (Cth) on the first day the amount becomes
overdue (expressed as daily rate).

Spot Check has the meaning given in Rule 6.2(a) (“Spot Checks”).

44168514_15 Scheme Rules 6


Current as at [1 January 2020]
Suspension Event, in relation to a Participating Lender, has the meaning given
in the Participating Lender Deed entered into by that Participating Lender.

Value means “value” as defined in the NHFIC Investment Mandate.

Verification Requirements means the requirements described in Part 1 of


Schedule 3 (“Verification Requirements”).

1.3 General interpretation


Headings (including those in brackets at the beginning of paragraphs) are for
convenience only and do not affect the interpretation of this document. Unless
the contrary intention appears, a reference in this document to:

(a) a group of persons is a reference to any 2 or more of them jointly and to


each of them individually;

(b) anything (including an amount) is a reference to the whole and each part
of it;

(c) the “Rules”, a “Rule” or a “Schedule” is a reference to the terms of or a


term in, or a schedule to, these Scheme Rules;

(d) a document (including this document) includes any variation or


replacement of or supplement to it;

(e) a “law” includes common law, principles of equity, decree and any
statute or other law made by any parliament (and statutes or other law
made by parliament includes any regulations and other instruments
under it and consolidations, amendments, re-enactments or
replacements of it);

(f) “Australian dollars” or “$” is a reference to the lawful currency of


Australia;

(g) a time of day is a reference to Sydney time;

(h) the singular includes the plural and vice versa;

(i) a “party” is a reference to NHFIC or a Participating Lender (as


applicable);

(j) a “person” includes an individual, corporation, company, firm, tribunal,


undertaking, association, organisation, partnership, joint venture, trust,
limited liability company, unincorporated organisation or government or
any agency, instrumentality or political subdivision thereof; in each case
whether or not being a separate legal entity;

(k) a particular person includes a reference to the person’s executors,


administrators, successors, substitutes (including persons taking by
novation) and assigns;

(l) the words “including”, “for example” or “such as” when introducing an
example, do not limit the meaning of the words to which the example
relates to that example or examples of a similar kind;

(m) a notice or other communication that must be given within a certain


period of days, the day on which the notice or communication is given,
and the day on which the thing is to happen, are not be counted in
calculating that period; and

44168514_15 Scheme Rules 7


Current as at [1 January 2020]
(n) a notice, report or other communication being provided in writing
includes that notice, report or other communication being provided in an
electronic form.

2 The Scheme
2.1 Scheme limit
The total number of Guarantee Certificates that may be issued by NHFIC in any
Financial Year:

(a) to all Participating Lenders, shall not exceed 10,000 Guarantee


Certificates; and

(b) to all Major Banks, shall not exceed 5,000 Guarantee Certificates,

with such Guarantee Certificates to be counted to apply to a particular Financial


Year in the same manner provided under section 29I (“Limit on guarantees in a
financial year”) of the NHFIC Investment Mandate in relation to the issue of
guarantees.

2.2 Scheme-Backed Loans


(a) Scheme-Backed Loans may only be:

(i) offered by a Participating Lender or its Representatives; and

(ii) made by a Participating Lender.

A person that is not at the relevant time appointed as a Participating


Lender (or who is not a Representative of a Participating Lender) is not
authorised by NHFIC to give any information or make any representation
in connection with the Scheme or the Scheme Documents or the affairs
of NHFIC.

(b) Matters relating to the offer and administration of Scheme-Backed Loans


by Participating Lenders are set out under each Participating Lender
Deed.

2.3 The Guarantee


Matters relating to the application of the Guarantee to Scheme-Backed Loans are
subject to, and are governed by, the terms of the Guarantee.

3 Eligibility Criteria
3.1 Overarching requirement
To obtain a benefit under the Guarantee in respect of an Eligible Loan,
Participating Lenders must only offer Eligible Loans to Eligible Borrowers in
respect of the purchase of an Eligible Property.

3.2 Eligible Borrowers


To be an Eligible Borrower under the Scheme, a person must, as at the Loan
Settlement Date:

44168514_15 Scheme Rules 8


Current as at [1 January 2020]
(a) be an “eligible first home buyer” for the purposes of section 29D
(“Eligible first home buyer”) of the NHFIC Investment Mandate;

(b) have, either:

(i) for a person who is an Individual Borrower, personally; or

(ii) for a person who is part of a Borrower Couple, together with the
other borrower,

a deposit of at least 5% and up to (but less than) 20% of the Value of the
Eligible Property being acquired;

(c) be acquiring an Eligible Property, using the proceeds of the relevant


Eligible Loan in full for that purpose; and

(d) represent to the Participating Lender that they intend to:

(i) commence their residence of that Eligible Property within


90 days of the date from which they may first legally occupy that
Eligible Property; and

(ii) thereafter, reside in the Eligible Property for so long as the


relevant Eligible Loan is a Scheme-Backed Loan.

3.3 Eligible Loans


To be an Eligible Loan under the Scheme, a loan must:

(a) be made by a Participating Lender to an Eligible Borrower;

(b) be an “eligible loan” for the purposes of section 29C (“Eligible loans”) of
the NHFIC Investment Mandate;

(c) be secured by a first-ranking mortgage granted over the Eligible Property


in favour of the Participating Lender;

(d) be payable only in Australian dollars;

(e) relate to:

(i) the purchase of an Existing Dwelling;

(ii) a House and Land Package;

(iii) a Land and Separate Contract to Build Home; or

(iv) an Off-the-Plan Arrangement;

(f) be in a Committed Amount of:

(i) not more than 95% of the relevant Value; and

(ii) not less than 80% of the relevant Value;

(g) have a Loan Settlement Date that is no earlier than the Commencement
Date for the Participating Lender; and

(h) be subject to, and comply in all respects with, the Relevant Laws and
Lender Policies,

44168514_15 Scheme Rules 9


Current as at [1 January 2020]
and, to avoid doubt, an Eligible Loan may comprise a single or more than one
loan instrument, provided all such instruments relate exclusively to the same
Eligible Property.

3.4 Eligible Property


To be an Eligible Property under the Scheme, a property must:

(a) satisfy the requirements of section 29C(2)(g) (“Eligible loan”) of the


NHFIC Investment Mandate (and, for these purposes, the areas
identified in section 29F (“Price cap”) of the NHFIC Investment Mandate
are taken to include each of the locations identified by postcode as set
out in the Price Cap Area Identification Schedule); and

(b) be an Established Dwelling or a New-Build Dwelling, in each case, for


which the Participating Lender assess the Value as at the time the
Eligible Loan is entered into,

and the Eligible Borrower(s) must be the sole registered owner(s) of that property
as at the relevant property settlement date.

3.5 Verification Requirements


The Verification Requirements establish the requirements and steps for
verification of the Eligibility Criteria to be undertaken by a Participating Lender in
relation to each Scheme-Backed Loan made by it.

3.6 Non-satisfaction of Eligibility Criteria


(a) If, at any time after a Guarantee Certificate has been issued in respect of
a loan, the Participating Lender becomes aware, or has reason to
suspect, that a relevant borrower has not satisfied any one of the
Eligibility Criteria (including where the Participating Lender has become
aware or has reason to suspect owing to a notice given to it by NHFIC or
any other person): which is owing to an act or omission of the borrower
which (to NHFIC’s the satisfaction) is fraudulent or wilful and which could
not reasonably have been identified by the Participating Lender in its
performance and completion of the Verification Requirements, the
Participating Lender must:

(i) diligently investigate and notify NHFIC of that non-satisfaction


(providing reasonable details, except to the extent that such
details have already been provided to it by NHFIC); and

(ii) in consultation with NHFIC, elect to either:

(A) notify NHFIC in writing that the Guarantee may be


cancelled by NHFIC in respect of the relevant loan, in
which case the loan is to be taken to not have been a
Scheme-Backed Loan for any purpose under the
Scheme Documents at any time or from such time as
the non-satisfaction arose (as the case may be); or

(B) have the Guarantee continue to apply in respect of the


loan as a Scheme-Backed Loan in accordance with the
Scheme Documents, provided that the Participating
Lender must take all appropriate and lawful actions and
steps as would be expected of a prudent lender in
relation to the relevant act or omission of the borrower;
or

44168514_15 Scheme Rules 10


Current as at [1 January 2020]
(b) which arises for any other reason (including, without limitation, acts or
omissions of the Participating Lender or any of its Representatives):

(i) the Participating Lender must diligently investigate and notify


NHFIC of that non-satisfaction (providing reasonable details,
except to the extent that such details have already been
provided to it by NHFIC); and

(ii) NHFIC may (in its absolute discretion) deem that, owing to such
non-satisfaction, the loan was not a Scheme-Backed Loan for
any purpose under the Scheme Documents at any time or from
such time as the non-satisfaction arose (as the case may be).

4 Scheme Places
[Note – section 29I of the NHFIC Investment Mandate and Rule 2.1 of these
Rules establish limits on allocations of Scheme Places, with the application of
any quotas (individual, global or as a combination of both) for allocations of
Scheme Places a feature to be determined throughout the Participating Lender
procurement process. The final determination on the application of quotas will be
made by NHFIC (in its absolute discretion), and these Rules (in particular Rules
4.3 and 4.4, the Application and Application Information provisions and the
Verification Requirements) will be conformed accordingly.]

4.1 Lender Designations


Each Participating Lender will be designated as either a Major Bank or a Non-
Major Bank Lender (Lender Designation). This Lender Designation will be
confirmed under each Participating Lender Deed.

4.2 Scheme Place allocations


(a) Without limiting the discretions of NHFIC or the provisions of any
Participating Lender Deed, Scheme Places may be allocated to
Participating Lenders individually and/or as a class.

(b) The number of Scheme Places allocated (or available to be allocated) to


each Participating Lender, and any conditions relating to such
allocations, will be set out under each Participating Lender Deed.

(c) [For global quotas, if applied] [In each Financial Year, all Participating
Lenders of a specified Lender Designation will be entitled to participate
in the issue of up to an aggregate number (generally and without any
other preference amongst them) as follows:]

Lender Designation Number of Scheme Places

Major Banks [●]

Non-Major Bank Lenders [●]

4.3 Reserve & Pre-Approval Applications


(a) Each Participating Lender may apply for a Scheme Place in respect of
an Eligible Loan where:

(i) an Eligible Borrower intends to apply for an Eligible Loan with


the Participating Lender, for which a Scheme Place may be

44168514_15 Scheme Rules 11


Current as at [1 January 2020]
reserved for 7 days (Reserve Application), and will not be
allocated to any other person, pending submission by the
Participating Lender of a Pre-Approval Application; and/or

(ii) the Participating Lender has either conditionally or


unconditionally approved the provision of that Eligible Loan, for
which a Scheme Place may be reserved for 95 days (and may
be extended by NHFIC upon request for a period not exceeding
an additional 95 days) (Pre-Approval Application), and will not
be allocated to any other person, pending expiry of that
reservation period,

and, in each case, according to the Scheme Portal there are Scheme
Places available to be utilised by that Participating Lender.

(b) NHFIC must, as soon as practicable, notify the Participating Lender


whether a Reserve Application or a Pre-Approval Application is approved
and, if approved, the terms and conditions upon which the approval is
given and may do so via the Scheme Portal.

(c) Upon confirmation of such approval, a Scheme Place will be reserved in


respect of the relevant Reserve Application or Pre-Approval Application.

(d) A Scheme Place reservation:

(i) evidences an approval by NHFIC that any subsequent issue of a


Guarantee Certificate in respect of that reservation is to be
counted in the Financial Year in which the reservation occurs,
for the purposes of section 29I(3) (“Limit on guarantees in a
financial year”);

(ii) entitles the Participating Lender to a Scheme Place for a


specified period from the date the reservation is approved; and

(iii) does not of itself entitle the Participating Lender to any benefit
under the Guarantee nor is it an approval for any registration
under the Guarantee or the issue of a Guarantee Certificate.

To obtain a benefit under the Guarantee in respect of a Scheme-Backed


Loan, the Participating Lender must apply for a Guarantee Certificate.

4.4 Guarantee Certificate Applications


(a) A Participating Lender shall be entitled to apply for a Guarantee
Certificate to be issued in respect of a Scheme-Backed Loan to be made
by it (Guarantee Certificate Application).

(b) A Guarantee Certificate Application may only be made:

(i) prior to the expiry of a Pre-Approval Application (where a


Scheme Place has been reserved) or otherwise if there are
Scheme Places available to be utilised by that Participating
Lender; and

(ii) at such time as funding of the Scheme-Backed Loan is


otherwise unconditional (other than for the issue of the
Guarantee Certificate).

Approval by NHFIC of a registration of a Scheme-Backed Loan under


the Guarantee will be evidenced by the issue to the Participating Lender
of a Guarantee Certificate.

44168514_15 Scheme Rules 12


Current as at [1 January 2020]
4.5 General provisions for Applications
(a) Each Application must be made via the Scheme Portal by submission of
all relevant Application Information.

(b) Applications that are complete and correct will be considered by NHFIC
upon their submission. Such Applications will generally be approved by
NHFIC upon their submission. However, NHFIC reserves the right to
decline an Application at its discretion.

(c) An Application which is incomplete or incorrect will be treated as not


having been made and NHFIC will notify the Participating Lender
accordingly.

4.6 Issuance of Guarantee Certificates


Once a Guarantee Certificate Application is approved by NHFIC, NHFIC will
issue a Guarantee Certificate to the relevant Participating Lender which will
include the following details:

(a) the Guarantee Certificate number;

(b) the account number(s) used by the Participating Lender to identify the
Scheme-Backed Loan;

(c) the Eligible Borrower’s name(s);

(d) the title reference and street address of the Eligible Property;

(e) the Value of the Eligible Property as at the Loan Settlement Date; and

(f) the Guaranteed Maximum Liability.

4.7 Variation, cancellation and re-issue of Guarantee Certificates


Once issued, a Guarantee Certificate:

(a) may be varied by NHFIC (in its absolute discretion) to correct any
manifest or proven error;

(b) will be cancelled immediately, without further action required by any


person, where the Guarantee is released in relation to the related
Scheme-Backed Loan or where Rules 3.6(a)(ii)(A) or 3.6(b)(ii) (“Non-
satisfaction of Eligibility Criteria”) apply;

(c) may be re-issued by NHFIC:

(i) where the Guarantee Certificate has been lost or destroyed, and
NHFIC is satisfied (in its absolute discretion) that the re-issue of
the Guarantee Certificate is necessary to evidence the
registration of the related Scheme-Backed Loan under the
Guarantee; or

(ii) where the Guarantee Certificate has been varied in accordance


with Rule 4.7(a); and

(d) may be cancelled and re-issued by NHFIC where the Scheme-Backed


Loan is refinanced to another Participating Lender in accordance with
section 29(C)(3) (“Eligible loan”) of the NHFIC Investment Mandate.

44168514_15 Scheme Rules 13


Current as at [1 January 2020]
5 Reporting
5.1 Information and reporting requirements
The Participating Lender must provide each of the following to NHFIC:

(a) for each calendar month, the Periodic Loan Data, within 5 Business
Days of the end of that calendar month in the form required by NHFIC;

(b) as soon as it becomes aware, details of any proposed changes to be


made by it to any Lender Policy, prior to such changes being made;

(c) for each Financial Half-Year and without limiting Rule 5.1(b), details of
any material changes to the answers previously provided by the
Participating Lender to the Lending Policy Questionnaire, within 10
Business Days after the end of that financial half-year (Material Policy
Change Report);

(d) a copy of the annual compliance certificate lodged with ASIC in


accordance with section 53 of the NCCP, within 5 Business Days of it
being lodged with ASIC (unless the Participating Lender is exempt from
the requirement to hold a credit licence under the NCCP);

(e) copies of Internal Audit reports prepared in accordance with Rule 6


(“Audit”); and

(f) all other Information, documents and materials reasonably requested in


writing by NHFIC:

(i) in connection with the Participating Lender’s residential


mortgage lending business; and

(ii) for the purposes of:

(A) assessing a Claim;

(B) NHFIC’s own compliance procedures; and

(C) NHFIC performing its functions in accordance with the


NHFIC Act and/or the requirements of the NHFIC
Investment Mandate,

or (if applicable) details the reasons why it cannot lawfully comply with
such a request, in each case, within 5 Business Days of NHFIC making
such a request.

5.2 Notice of certain matters


The Participating Lender agrees to give notice to NHFIC of the following:

(a) in relation to its Australian Credit Licence (if applicable):

(i) promptly and in any event within 5 Business Days of ASIC


having been notified, details of any breach of the conditions of
its Australian Credit Licence as have been notified to ASIC;

(ii) promptly and in any event within 5 Business Days of dispatch or


receipt:

44168514_15 Scheme Rules 14


Current as at [1 January 2020]
(A) a copy of any notice from ASIC under section 49 of the
NCCP directing the Participating Lender to:

(aa) provide a written statement containing specified


information about the credit activities engaged
in by the Participating Lender; or

(ab) obtain an audit report; and

(B) if requested by NHFIC, a copy of the written statement


or audit report the Participating Lender provides to
ASIC; and

(C) a copy of any notice from ASIC exercising its rights


under section 247 of the NCCP to investigate the
Participating Lender’s residential mortgage lending
business;

(b) promptly and in any event within 5 Business Days of it becoming so


aware or forming a suspicion, the details of any matter that may be
subject to operation of Rule 3.6 (“Non-satisfaction of Eligibility Criteria”);
and

(c) promptly and in any event within 5 Business Days of it becoming so


aware, the details of any Suspension Event that has occurred or the
subsistence of any event or circumstance that would entitle NHFIC to
deem that a Suspension Event has occurred (and, in each case, any
steps being taken to remedy it).

5.3 Erroneous information


If the Participating Lender becomes aware of an error in any of the Information,
documents or materials provided by it to NHFIC, it shall notify NHFIC of the
erroneous information (and provide the corrected information to NHFIC) as soon
as reasonably practicable.

6 Audit
6.1 Internal Audits
(a) The Participating Lender must:

(i) initially, not later than 6 months after the Loan Settlement Date
of the first Scheme-Backed Loan made by it (or, if NHFIC in its
absolute discretion agrees, at the same time as the initial annual
audit is carried out pursuant to Rule 6.1(a)(ii) (“Annual internal
audit”)); and

(ii) annually, not later than 31 August of each year (unless the
Participating Lender is granted a later deadline by NHFIC),

procure that its internal audit team carries out an audit (an Internal
Audit) of the activities of the Participating Lender under the Scheme.

(b) Each Internal Audit must:

(i) test a sample of Scheme-Backed Loans to ensure that:

(A) the Eligibility Criteria were satisfied at the time the loan
was entered into and continue to be complied with; and

44168514_15 Scheme Rules 15


Current as at [1 January 2020]
(B) the requirements of Rule 5 (“Reporting”) have been
complied with and all Information, documents and
materials provided to NHFIC were complete and
accurate as at the date provided; and

(ii) include an assessment of whether:

(A) the Participating Lender has in place policies and


procedures (including internal controls and governance
processes) to ensure compliance with the Scheme
Documents; and

(B) the operational practices of the Participating Lender


comply with the Scheme Documents.

(c) The sample of Scheme-Backed Loans for the purpose of each Internal
Audit must:

(i) for the initial Internal Audit, include Scheme-Backed Loans for
which the Loan Settlement Date falls within the first 3 months
after the Loan Settlement Date of the first Scheme-Backed Loan
made by the Participating Lender; and

(ii) for all Internal Audits, represent at least 20% of the total number
of Scheme-Backed Loans made by the Participating Lender
during the previous 12-month period ending on the date of the
Internal Audit.

(d) No later than 10 Business Days after the deadline referred to in Rule
6.1(a), the Participating Lender must submit a written report to NHFIC
describing (in reasonable detail):

(i) the findings of the Internal Audit, the audit process undertaken
and the evidence upon which the findings are based; and

(ii) any material divergences from Lender Policies of the


Participating Lender, or from the Scheme Documents, that were
detected in the audit and (having consulted with NHFIC on such
matters) the management action recommended or adopted to
address those divergences and the implementation timescale for
such action.

6.2 Spot Checks


(a) Subject to Rule 6.2(b), at any time and upon reasonable notice being
given to the Participating Lender, NHFIC (or an agent acting on behalf of
NHFIC) may conduct an audit (a Spot Check) of a sample of Scheme-
Backed Loans originated by the Participating Lender to ensure that the
Scheme Documents have been complied with in relation to those loans.

(b) The maximum sample size of the Scheme-Backed Loans audited during
a Spot Check shall be limited to 20% of the total number of Scheme-
Backed Loans made by the Participating Lender.

(c) Each Spot Check shall be undertaken in compliance with all relevant
laws and each party shall bear its own Costs incurred in relation to any
Spot Checks.

44168514_15 Scheme Rules 16


Current as at [1 January 2020]
6.3 General
(a) Any Internal Audit or Spot Check will be based on such audit questions
as NHFIC may consider to be appropriate.

(b) If, during the course of a Spot Check, NHFIC determines that:

(i) the policies and procedures (including internal controls and


governance processes) that the Participating Lender has in
place to ensure compliance with the Scheme Documents have
not been complied with;

(ii) the Scheme Documents have not been complied with in any
material respect;

(iii) any Information, documents or materials provided by the


Participating Lender to NHFIC pursuant to the Scheme
Documents is incomplete or inaccurate; or

(iv) no or insufficient progress has been made in relation to any


recommendations arising from any Internal Audit or previous
Spot Check,

details of the determinations shall be provided to the Participating Lender


in a written report prepared by or on behalf of NHFIC, which will include
any recommendations that NHFIC may have.

(c) If an Internal Audit or Spot Check discloses a significant number of


instances of non-compliance (of any of the kinds specified in Rule
6.3(b)):

(i) NHFIC (or an agent acting on behalf of NHFIC) may conduct a


Spot Check or an additional Spot Check within a reasonable
period and produce a written report to the Participating Lender
following that Spot Check; and/or

(ii) NHFIC may (in its absolute discretion):

(A) require the Participating Lender to, and the Participating


Lender must, notify ASIC or the Australian Prudential
Regulation Authority of such instances of non-
compliance; and/or

(B) act in accordance with clause 10 of the Participating


Lender Deed (“Suspension Events”).

7 Scheme Portal
(a) NHFIC will establish and maintain a Scheme Portal. Access and use of
the Scheme Portal by Participating Lenders will be governed by the
Scheme Portal User Manual.

(b) Unless NHFIC otherwise notifies in writing, all Applications and Claims
must be made on the Scheme Portal.

(c) NHFIC shall make available to the Participating Lender on the Scheme
Portal details of:

(i) the maximum number of Guarantee Certificates that can be


issued under the Scheme in a relevant Financial Year;

44168514_15 Scheme Rules 17


Current as at [1 January 2020]
(ii) the number of Scheme Places that have been reserved in the
current Financial Year;

(iii) the number of Guarantee Certificates that have been issued in


the current Financial Year;

(iv) the number of Scheme Places that remain available in the


current Financial Year;

(v) the number of Scheme Places that have been allocated for
utilisation by the Participating Lender in a relevant Financial
Year; and

(vi) the number of Guarantee Certificates that have been issued to


the Participating Lender in each relevant Financial Year.

(d) NHFIC may have additional information published on the Scheme Portal,
including but not limited to:

(i) the name of the Participating Lender; and

(ii) any amendment or supplement to the Scheme Documents.

8 Refinancing of Scheme-Backed Loans


(a) An outstanding Scheme-Backed Loan may only be refinanced in a
manner that allows it to continue to have the benefit of the Guarantee in
accordance with section 29C(3) (“Eligible loan”) of the NHFIC Investment
Mandate.

(b) If an existing Scheme-Backed Loan is to be refinanced by a Participating


Lender in accordance with section 29C(3) of the NHFIC Investment
Mandate:

(i) the Participating Lender must submit a Guarantee Certificate


Application via the Scheme Portal in respect of the refinancing of
an existing Scheme-Backed Loan in accordance with Rule 4.4
(“Guarantee Certificate Applications”); and

(ii) if approved by NHFIC, NHFIC shall issue to the Participating


Lender a Guarantee Certificate in accordance with Rule 4.5
(“Issuance of Guarantee Certificates”) and cancel the existing
Guarantee Certificate issued for the refinanced Scheme-Backed
Loan on the Loan Settlement Date,

and, for the avoidance of doubt, the limitations on Scheme Place


allocations shall not apply to Guarantee Certificates issued in respect of
loans applied for the purposes of refinancing an existing Scheme-
Backed Loan.

9 Transfers of Scheme-Backed Loans


9.1 Permitted Transfers
A Scheme-Backed Loan (and any rights, obligations or interests in it or the
mortgage securing it) may be assigned or transferred by a Participating Lender to
another person where:

44168514_15 Scheme Rules 18


Current as at [1 January 2020]
(a) NHFIC has given its prior written consent; or

(b) the assignment or transfer is to:

(i) another Participating Lender; or

(ii) a body corporate or trust in the course of securitisation or the


issuance of covered bonds or any other process whereby
funding is raised directly or indirectly on the security of the
Eligible Loan (each such process being a mortgage-backed
funding arrangement) provided the conditions in Rule 9.2
(“Mortgage-backed funding arrangement”) are satisfied.

9.2 Mortgaged-backed funding arrangements


The conditions for a Permitted Transfer under a mortgaged-backed funding
arrangement are:

(a) the Participating Lender continues to be the lender of record and any
Guaranteed Liability incurred or expected to be incurred by the assignee
or transferee shall be deemed for the purposes of these Rules and the
Guarantee to be a Guaranteed Liability incurred or expected to be
incurred by the Participating Lender (and not by the assignee or
transferee);

(b) either:

(i) the Scheme-Backed Loan continues to be serviced by the


Participating Lender or a related entity of the Participating
Lender; or

(ii) as a result of the insolvency of the Participating Lender, any


compulsory transfer effected by law or for any other reason, the
servicing of the Scheme-Backed Loan is assumed by another
Participating Lender or by another entity that has undertaken to
NHFIC (in a form satisfactory to NHFIC) to comply with and to
be bound by all the provisions of the Scheme Documents that
are expressed to be applicable to a Participating Lender (and
references in these Rules to the Participating Lender shall be
deemed, so far as the context admits, to mean that successor of
the original Participating Lender);

(c) the treatment of that Scheme-Backed Loan by the Participating Lender


or such other person does not differ from the treatment of other loans
included by the mortgage-backed funding arrangement; and

(d) the internal assurance functions of the Participating Lender and NHFIC
have full access to the information and documentation relating to the
Scheme-Backed Loan in order to assess compliance by the Participating
Lender with its obligations under the Scheme Documents in relation to
such Scheme-Backed Loan as if the assignment or transfer had not
been effected.

10 Claims Procedures
10.1 When Claims may be made
Subject to Rule 10.4 (“Clawback of Claim payments”), a valid claim is made by a
Participating Lender in respect of any Guaranteed Liability if:

44168514_15 Scheme Rules 19


Current as at [1 January 2020]
(a) a Default has occurred in respect of the relevant Scheme-Backed Loan;

(b) an Enforcement has occurred and the amount of the Guaranteed Liability
has been determined;

(c) the claim is for an amount that is not greater than the applicable
Guaranteed Maximum Liability; and

(d) the Participating Lender has:

(i) submitted documentation to NHFIC via the Scheme Portal


evidencing that, in relation to the relevant Non-Performing Loan:

(A) at the time the Non-Performing Loan was originated by


the relevant Participating Lender, it satisfied the
Eligibility Criteria; and

(B) the Participating Lender (and any person engaged by


the Participating Lender to manage its arrears,
collections, hardship and enforcement operations):

(aa) has complied with the Lender Policies with


respect to that Non-Performing Loan; and

(ab) is not, or (or in the case of such other persons)


are to their knowledge not, in breach of Part 5
of the National Credit Code of Australia or
Regulatory Guide 96 Debt collection guide for
collectors and creditors published jointly by the
Australian Competition & Consumer
Commission and the Australian Securities and
Investments Commission; and

(ii) notified NHFIC of the Default as part of the information provided


under its Periodic Loan Data obligations; and

(iii) submitted a claim to NHFIC via the Scheme Portal in respect of


the Guaranteed Liability.

10.2 Monthly accounts and remittances for Claims


No later than 10 Business Days after the end of each calendar month, the
Participating Lender shall submit to NHFIC an account detailing:

(a) each Claim which is being made in respect of that calendar month and
the total amount of such Claims (C); and

(b) each amount required to be repaid by it pursuant to Rule 10.4


(“Clawback of Claim payments”) (CB).

The account shall include a calculation of the net amount payable by a party in
respect of such calendar month (N), where:

N = C – CB

If N is:

(c) greater than zero, an amount equal to N is payable by NHFIC to the


Participating Lender; or

44168514_15 Scheme Rules 20


Current as at [1 January 2020]
(d) less than zero, an amount equal to the absolute value of N is payable by
the Participating Lender to NHFIC.

10.3 Payments in respect of valid Claims


(a) All amounts determined, at the relevant time, to be payable under
Rule 10.2 (“Monthly accounts and remittances of Claims”) shall be
aggregated and paid by the relevant party to the other on the last
Business Day of each Quarter (each a Payment Date) subject to the
following:

(i) if, in relation to any Claim, NHFIC is not satisfied that the
requirements of this Rule 10 have been met or are not satisfied
as to the determination of any amounts recovered, they may
notify the Participating Lender of such fact, in which event the
Claim shall be a disputed Claim;

(ii) if NHFIC notifies the Participating Lender of a disputed Claim on


or before the 3rd Business Day before the Payment Date, the
amount payable shall (if payable by NHFIC) be adjusted to the
amount which NHFIC considers to be payable and (if payable by
the Participating Lender) shall remain as calculated by the
Participating Lender;

(iii) for the avoidance of doubt, nothing in these Rules prevents


NHFIC notifying the Participating Lender of a disputed Claim
under Rule 10.3(a)(i) after payment in relation to the Claim has
been made; and

(iv) if as a result of any dispute procedures under the Participating


Lender Deed the amount payable by one party to the other
under Rule 10.2 (“Monthly accounts and remittances for
Claims”) is determined to be different from that actually paid, the
payment shall be adjusted accordingly for the account payable
on the next Payment Date.

(b) All payments under this Rule 10.3 by one party to the other shall be
made by or on behalf of the paying party to such bank account as the
receiving party shall have notified in writing to the paying party on or
before the Commencement Date relating to the Participating Lender (or,
in the event of a change, notified not less than 5 Business Days before
the date on which the relevant payment is due).

(c) If either party fails to make a payment due by the applicable due date,
such party shall be liable to pay interest to the other party on the
outstanding amount at the Specified Rate for the time being.

10.4 Clawback of Claim payments


If, following payment of a Claim by NHFIC, the Participating Lender or NHFIC
become aware that the Non-Performing Loan to which the Claim related was
entered into, or actions or omissions in relation to the Scheme Documents were
taken or not taken in respect thereof, as a consequence of any fraudulent or
criminal act (including, without limitation, fraudulent misrepresentation) on the
part of the Participating Lender, its officers, employees or agents or any other
person acting on behalf of the Participating Lender, in each case as finally
determined by a court, an arbitrator or any relevant regulatory authority in
Australia, the relevant party shall promptly notify the other thereof. The
Participating Lender shall:

44168514_15 Scheme Rules 21


Current as at [1 January 2020]
(a) reimburse NHFIC in full the amount paid by NHFIC in respect of the
Claim; and

(b) pay interest to NHFIC on such amount at the Specified Rate for the time
being from the date of payment by NHFIC of such Claim, in each case
within 20 Business Days of the date of the notification.

11 Changes to these Scheme Rules


11.1 Changes to these Rules by NHFIC
Without limiting Rule 11.2 (“Changes required by the Federal Government”),
NHFIC may, at any time and in its absolute discretion, amend or supplement
these Rules by publishing such amendment or supplement on the Scheme Portal
(and NHFIC will endeavour to notify each Participating Lender in writing of the
publication), provided that such amendment or supplement does not:

(a) reduce NHFIC’s obligations to a Participating Lender under the


Guarantee or subsisting Guarantee Certificate in a manner which is
prejudicial to the interests of the Participating Lender without the
Participating Lender’s prior written consent; or

(b) have retrospective effect (unless it is to correct a manifest or proven


error or an omission of a wholly technical nature and the correction is not
(in NHFIC’s opinion) prejudicial to the rights or interests of the
Participating Lender under the Guarantee or subsisting Guarantee
Certificate).

NHFIC shall use reasonable endeavours to consult (in such manner as NHFIC
sees fit) with the Participating Lenders before making any such amendment or
supplement, unless NHFIC determines that the proposed amendment or
supplement should be implemented as a matter of urgency or for purposes of
compliance by NHFIC with the requirements of the NHFIC Act and/or the NHFIC
Investment Mandate and it is not practicable for such consultation to take place.

11.2 Changes required by the Federal Government


NHFIC may, at any time and at its absolute discretion, amend or supplement the
terms of these Rules or the Guarantee at the express written direction of the
Minister.

11.3 Date amendment or supplement becomes effective


Except where the prior written consent of the Participating Lender is required, an
amendment or supplement made in accordance with this Rule 11 does not take
effect until the expiry of a period of 20 Business Days following the day on which
notice of the amendment or supplement is first published on the Scheme Portal.

12 Notices in relation to the Scheme Documents


All notices, certificates, claims, demands, consents, approvals, waivers and other
communications required to be provided in connection with a Scheme Document:

(a) must be in the form and delivered as required by the Scheme Document;
or

(b) if the Scheme Document does not include such provisions:

44168514_15 Scheme Rules 22


Current as at [1 January 2020]
(i) must:

(A) be made in writing; and

(B) either be:

(aa) where supported by the Scheme Portal,


submitted, published or otherwise made
available via the Scheme Portal; or

(ab) where the Scheme Portal does not support


such delivery, delivered by hand, prepaid post
or email to the address (as appropriate) as
notified to the sender by the recipient from time
to time;

(C) signed or submitted by or sent from the email account of


a duly authorised officer of the sender; and

(D) marked for attention in the way notified to the sender by


the recipient from time to time; and

(ii) will take effect from the time they are received unless a later
time is specified in them, where:

(A) if submitted, published or otherwise made available via


the Scheme Portal, are taken to be received on the date
they are so submitted, published or made available;

(B) if sent by post, are taken to be received 3 Business


Days after posting (or 5 Business Days after posting if
sent across international boundaries);

(C) if sent by email, are taken to be received when the


email is dispatched by the sender to each of the email
addresses specified by the recipient, unless, for each of
the addresses, the sender receives an automatic
notification that the email has not been received (other
than an out of office greeting for the named addressee)
and it receives the notification before 2 hours after
dispatch; or

(D) if given by hand, are taken to be received at the time of


delivery,

and, in all cases, if they are received after 5.00pm in the place of
receipt or on a non-Business Day, they are taken to be received
at 9.00am on the next Business Day.

13 General
13.1 Governing law and jurisdiction
(a) These Rules are governed by the laws of New South Wales.

(b) The courts having jurisdiction in New South Wales have non-exclusive
jurisdiction to settle any dispute arising out of or in connection with these
Rules.

44168514_15 Scheme Rules 23


Current as at [1 January 2020]
(c) Notwithstanding Rule 13.1(b), NHFIC shall not be prevented from taking
proceedings relating to a relevant dispute in any other courts with
jurisdiction. To the extent allowed by law, NHFIC may take concurrent
proceedings in any number of jurisdictions.

13.2 Compliance with laws


Nothing in these Rules requires NHFIC to contravene the NHFIC Act, the NHFIC
Investment Mandate nor any other law in the performance and compliance by it
of its obligations under the Scheme Documents.

44168514_15 Scheme Rules 24


Current as at [1 January 2020]
Scheme Rules
Schedule 1 Price Cap Area Identification
Schedule

The following table sets out each location (identified by postcode) that is included in an
area to which a relevant price cap applies (such caps as provided under section 29F
(“Price cap”) of the NHFIC Investment Mandate). Where a range of postcodes is denoted,
all postcodes (inclusive of those specified) are included by that range.

[Note – postcodes will be included in this Schedule upon finalisation of the NHFIC
Investment Mandate amendments (following the present public consultation and subject
to government approvals).]

Area Relevant postcodes

Australian Capital [All postcodes]


Territory

New South Wales – Capital city


capital city and
regional centre [postcodes]

Regional centre – Newcastle and Lake Macquarie

[postcodes]

Regional centre – Illawarra

[postcodes]

New South Wales – [postcodes]


other (including
Jervis Bay and
Norfolk Island)

Victoria – capital city Capital city


and regional centre
[postcodes]

Regional centre – Geelong

[postcodes]

Victoria – other [postcodes]

Queensland – Capital city


capital city and
regional centre [postcodes]

Regional centre – Gold Coast

[postcodes]

Regional centre – Sunshine Coast

[postcodes]

44168514_15 Scheme Rules 25


Current as at [1 January 2020]
Area Relevant postcodes

Queensland – other [postcodes]

Northern Territory [All postcodes]

South Australia – [postcodes]


capital city

South Australia – [postcodes]


other

Western Australia – [postcodes]


capital city

Western Australia – [postcodes]


other (including
Christmas Island
and Cocos (Keeling)
Islands)

Tasmania – capital [postcodes]


city

Tasmania – other [postcodes]

44168514_15 Scheme Rules 26


Current as at [1 January 2020]
Scheme Rules
Schedule 2 Required Information

[Note – information requirements will be included in this Schedule by determination of


NHFIC, in consultation with those Participating Lenders who are to be appointed for
1 January 2020 commencement. Relevant information will include personal information of
borrowers (including Medicare number(s), confirmations from lenders on own satisfaction
of eligibility matters and information in relation to Eligible Loans and Eligible Properties, in
each case, at appropriate times and taking account of the overall customer experience.]

Part 1 – Reserve & Pre-Approval Information – Reserve Application information

The following information is to be submitted via the Scheme Portal for each Reserve
Application.

[Individual fields to be included]

Part 2 – Reserve & Pre-Approval Information – Pre-Approval Application


information

The following information is to be submitted via the Scheme Portal for each Pre-
Approval Application.

[Individual fields to be included]

Part 3 – Guarantee Certificate Application Information – New loans

The following information is to be submitted via the Scheme Portal for each Guarantee
Certificate Application for a new loan.

[Individual fields to be included]

Part 4 – Guarantee Certificate Application information – for a refinancing of an


existing Scheme-Backed Loan

The following information is to be submitted via the Scheme Portal for each Guarantee
Certificate Application for a refinancing loan.

[Individual fields to be included]

44168514_15 Scheme Rules 27


Current as at [1 January 2020]
Scheme Rules
Schedule 3 Verification Requirements

Part 1 – Verification measures

The Participating Lender must ensure that the following minimum verification measures
are undertaken to confirm satisfaction of the Eligibility Criteria.

[Note – verification requirements will be included in this Schedule by determination of


NHFIC, in consultation with those Participating Lenders who are to be appointed for
1 January 2020 commencement. NHFIC intends that the requirements will refer to factual
/ specific materials and satisfaction of the minimum requirements will satisfy Participating
Lender obligations to have taken necessary verification steps.]

Part 2 – Matters to be declared under a Borrower Declaration

[Note – matters to be set out in this Schedule by determination of NHFIC, in consultation


with those Participating Lenders who are to be appointed for 1 January 2020
commencement. NHFIC intends that the requirements will refer to specific matters and
satisfaction of the minimum requirements by their inclusion in statutory declarations
obtained from borrowers will satisfy Participating Lender obligations to have obtained
such declarations.]

44168514_15 Scheme Rules 28


Current as at [1 January 2020]
Scheme Rules

Schedule 4 Regular Reporting Requirements

Part 1 – Periodic Loan Data

The information required as Periodic Loan Data in respect of each Scheme-Backed


Loan is set out below.

[Note – matters to be set out in this Schedule by determination of NHFIC, in


consultation with those Participating Lenders who are to be appointed for 1 January
2020 commencement. NHFIC intends that the requirements will refer to specific
matters and be able to be reported in a consistent form and format.]

[Individual reporting items / fields to be included.]

Part 2 – Lending Policy Questionnaire

The questions and information comprising the Lender Policy Questionnaire for the
Participating Lender are set out below.

[Note – matters to be set out in this Schedule by determination of NHFIC, in


consultation with those Participating Lenders who are to be initially appointed to the
Scheme lender panel, having regard in particular to the Lender Policy information that
is required to be provided under the RFP. NHFIC intends that the requirements will
refer to specific matters and be able to be reported in a consistent form and format.]

[Individual questions / information requirements to be included.]

44168514_15 Scheme Rules 29


Current as at [1 January 2020]
SCHEDULE 4 DEED OF GUARANTEE

The draft Deed of Guarantee follows after this page.

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 95
First Home Loan Deposit Scheme
Proposed Document

Deed of Guarantee in respect of the First Home Loan Deposit


Scheme

What is this document Deed of Guarantee or Guarantee.


usually called?

Who enters into this This document is a deed poll made by National Housing Finance and Investment
document? Corporation (NHFIC) in favour of the “Beneficiaries” who are any Participating
Lenders (appointed by NHFIC to the panel of lenders for the Scheme) to whom a
“Guaranteed Liability” is owed from time to time.
Participating Lenders do not enter into or execute this Deed of Guarantee. This
Deed of Guarantee is only executed by NHFIC.

What does it do? Provides the terms upon which NHFIC guarantees Participating Lenders’ liabilities
under the Scheme.

What matters does it - Effective date and termination of guarantee.


cover?
- Liabilities that are guaranteed by NHFIC (including maximum guaranteed
liability).
- NHFIC’s register of guarantees, and issue, variation and cancellation of
Guarantee Certificates.
- Release of the guarantee on the occurrence of certain events.
- Requirement to make claims in accordance with Scheme Rules’ claims
procedures.

What other documents are - Scheme Rules – establishes certain capacity, participation and eligibility criteria
closely related to it? for the Scheme, and it may be updated from time to time for developments in
the Scheme.

- Participating Lender Deed – provides an overall framework for the appointment


by NHFIC of each Participating Lender to a panel (Panel) and for the conduct
and performance by that Participating Lender of activities in connection with the
Scheme.

Why is this document This document is provided in connection with the Request for Proposal (RFP)
available? released on 28 October 2019 and issued by NHFIC in connection with the
Scheme. Respondents to the RFP are advised that NHFIC will be responsible for
finalising the drafting of this Deed of Guarantee.
This document is provided to Respondents to inform them of the terms upon which
NHFIC intends to guarantee Participating Lenders under the Scheme, and should
be read by Respondents in conjunction with the Scheme Rules and Participating
Lender Deed to inform lenders’ responses to the RFP. NHFIC intends to only
execute one Deed of Guarantee in favour of all Participating Lenders (i.e. the
terms of the Deed of Guarantee will be the same as it applies to all Participating
Lenders) and this document will not the subject of negotiation with Respondents.
This document is provided in draft and will be finalised by the NHFIC:
- as part of the document package available to those Participating Lenders
selected by NHFIC; and
- following consultations with the Australian Prudential Regulation Authority and
any other relevant government authorities, which may affect the drafting of the
document.
DEED
DEED OF GUARANTEE IN RESPECT OF THE FIRST HOME LOAN DEPOSIT
SCHEME
CONTENTS

1. Interpretation 2
1.1. Definitions 2
1.2. General interpretation 3
1.3. Effective Date 4

2. Guarantee 4

3. Claims 5

4. Register and reliance on Guarantee Certificates 5

5. Benefit and duration of Guarantee 5

6. Limitations on the Guarantor’s liability 7

7. Preservation of Rights 7

8. Amendment and termination 7

9. Notices 7

10. Governing law 8

First Home Loan Deposit Scheme – Deed of Guarantee Page i


DEED OF GUARANTEE

Date
This Deed of Guarantee is dated the _________ day of ______________ 2019.

Parties
This Deed of Guarantee (Deed) is made by:

1. THE NATIONAL HOUSING FINANCE AND INVESTMENT CORPORATION


(the Guarantor)

IN FAVOUR OF

2. THE BENEFICIARIES being Participating Lenders to whom the Guaranteed


Liabilities are from time to time owed (the Beneficiaries).

Context
This Deed is made in the following context:

A. The Guarantor is responsible for implementing the First Home Loan Deposit
Scheme (Scheme), an Australian Government initiative to assist eligible first
home buyers to access the housing market more quickly.

B. As part of the Scheme, the Guarantor will provide a guarantee to Participating


Lenders in accordance with this Deed of Guarantee to allow eligible first home
buyers to purchase an eligible residential property with a deposit of between 5
and 20 per cent.

C. Section 8(1)(ca) of the National Housing Finance and Investment Corporation


Act 2018 authorises the Guarantor to issue guarantees to improve housing
outcomes.

D. The guarantee provided by the Guarantor under this Deed is subject to the
following terms and conditions.

First Home Loan Deposit Scheme – Deed of Guarantee Page 1


1. Interpretation

1.1. Definitions
1.1.1. Unless the contrary intention appears, in this Deed these terms have the
following meanings:

Beneficiary means a Participating Lender to whom a Guaranteed


Liability from time to time is owed.
Borrower has the meaning given in the Scheme Rules.
Couple
Borrower has the meaning given in the Scheme Rules.
Hardship
Business Day means a day (excluding Saturday and Sunday) on which
banks are generally open in Sydney.
Claims means the procedures for making a claim in respect of a
Procedures Guaranteed Liability as set out in the Scheme Rules.
Effective Date means the date specified in clause 1.3.
Eligible Property has the meaning given in the Scheme Rules.
Enforcement has the meaning given in the Scheme Rules.
Guarantee means a certificate issued in accordance with this Deed
Certificate and the Scheme Rules to evidence the registration of a
Scheme-Backed Loan in the Register.
Guaranteed has the meaning given in clause 2.1.1.
Liability
Guaranteed means, in respect of any Scheme-Backed Loan, the
Maximum amount designated as the “Guaranteed Maximum
Liability Liability” for that Scheme-Backed Loan in the Register
and referenced in the Guarantee Certificate being an
amount calculated using the following formula:
A – B,
where:
A is 20 per cent of the Value of the Eligible Property that
is the subject of the Scheme-Backed Loan; and
B is the deposit paid by the Individual Borrower or
Borrower Couple under the terms of the Scheme-Backed
Loan.
Individual has the meaning given in the Scheme Rules.
Borrower
Loan Settlement has the meaning given in the Scheme Rules.
Date

First Home Loan Deposit Scheme – Deed of Guarantee Page 2


Participating has the meaning given in the Scheme Rules.
Lender
Payment Default means, in respect of any Scheme-Backed Loan, a failure
by the relevant Individual Borrower or Borrower Couple,
on or after the Effective Date and upon Enforcement of
that Scheme-Backed Loan, to make any payment of any
amount to a Participating Lender under the Scheme-
Backed Loan when that amount becomes due and
payable under the Scheme-Backed Loan.
Permitted has the meaning given in the Scheme Rules.
Transfer
Register has the meaning given in clause 4.1.1 of this Deed.
Scheme-Backed has the meaning given in the Scheme Rules.
Loan
Scheme Rules means the “First Home Loan Deposit Scheme – Scheme
Rules” published by the Guarantor (as in force from time
to time).
Value has the meaning given in the Scheme Rules.

1.2. General interpretation


Headings (including those in brackets at the beginning of paragraphs) are for
convenience only and do not affect the interpretation of this Deed. Unless the
contrary intention appears, a reference in this Deed to:
a. a group of persons is a reference to any 2 or more of them jointly and to
each of them individually;
b. anything (including an amount) is a reference to the whole and each part of
it;
c. a document (including this Deed) includes any variation or replacement of
or supplement to it;
d. a “law” includes common law, principles of equity, decree and any statute
or other law made by any parliament (and statutes or other law made by
parliament includes any regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of it);
e. a time of day is a reference to Sydney time;
f. the singular includes the plural and vice versa;
g. a “person” includes an individual, corporation, company, firm, tribunal,
undertaking, association, organisation, partnership, joint venture, trust,
limited liability company, unincorporated organisation or government or any
agency, instrumentality or political subdivision thereof; in each case
whether or not being a separate legal entity;

First Home Loan Deposit Scheme – Deed of Guarantee Page 3


h. a particular person includes a reference to the person’s executors,
administrators, successors, permitted substitutes (including persons taking
by novation) and permitted assigns;
i. the word “including” when introducing an example, does not limit the
meaning of the words to which the example relates to that example or
examples of a similar kind;
j. a notice that must be given within a certain period of days, the day on
which the notice is given, and the day on which the thing is to happen, are
not to be counted in calculating that period; and
k. a notice, report or other communication being provided in writing includes
that notice, report or other communication being provided in an electronic
form.

1.3. Effective Date


1.3.1. This Deed comes into effect on 1 January 2020.

2. Guarantee
2.1.1. Subject to the terms of this Deed, if in respect of a Scheme-Backed Loan:
a. a Payment Default occurs; and
b. there is money owed to the Beneficiary by an Individual Borrower or
Borrower Couple under the terms of the Scheme-Backed Loan following
Enforcement of that Scheme-Backed Loan,
the Guarantor irrevocably guarantees to that Beneficiary the payment of an
amount (being the Guaranteed Liability) equal to the lesser of:
c. the money owed to the Beneficiary by an Individual Borrower or Borrower
Couple under the terms of a Scheme-Backed Loan following Enforcement
of that Scheme-Backed Loan; and
d. the Guaranteed Maximum Liability.

2.1.2. The Guarantor undertakes in favour of the Beneficiaries that the Guarantor
shall, upon receipt of a Beneficiary’s written claim made in accordance with
clause 3, pay to the Beneficiary the Guaranteed Liability.

2.1.3. In determining the amount of any payment to be made in order to satisfy its
obligations under this clause 2, the Guarantor will be entitled to take into
account, set off against, and deduct from, its proposed payment any amounts:
a. already paid by the Guarantor to the relevant Beneficiary in respect of the
particular Guaranteed Liability; and
b. any amounts required to be repaid by the Beneficiary to the Guarantor in
accordance with the Scheme Rules.

First Home Loan Deposit Scheme – Deed of Guarantee Page 4


2.1.4. This Deed is binding and effective though not executed by the Beneficiaries.

3. Claims
3.1.1. A claim by a Beneficiary for payment under this Deed must be in accordance
with the Claims Procedures.

4. Register and reliance on Guarantee Certificates


4.1.1. The Guarantor will maintain a register recording the details of each Scheme-
Backed Loan including details of the relevant Guarantee Certificate,
Guaranteed Maximum Liability, Beneficiary, Individual Borrower or Borrower
Couple, and Eligible Property (the Register).

4.1.2. In the event of any conflict or inconsistency between the Register and a
Guarantee Certificate (but absent any manifest or proven error), the Register
prevails.

4.1.3. Subject only to clauses 4.1.2, 4.1.4 and 6, a Beneficiary may rely upon the
issue of a Guarantee Certificate as conclusive evidence that an amount up to
the Guaranteed Maximum Liability described in the Guarantee Certificate is
guaranteed by the Guarantor under and on the terms of this Deed.

4.1.4. A Guarantee Certificate and the relevant record in the Register cannot be varied
or cancelled once issued unless:
a. the relevant Scheme-Backed Loan is the subject of a Permitted Transfer
under the Scheme Rules;
b. the guarantee in respect of the Scheme-Backed Loan is released in
accordance with clause 5.1.2 of this Deed;
c. varied or cancelled in accordance with the Scheme Rules; or
d. the variation or cancellation is otherwise agreed by the Guarantor and the
relevant Participating Lender that has been issued the Guarantee
Certificate.

4.1.5. Any variation, cancellation or re-issue of a Guarantee Certificate will be in


accordance with the Scheme Rules and this clause 4.

5. Benefit and duration of Guarantee


5.1.1. Subject to clause 5.1.2, this Deed shall inure to the benefit of each Beneficiary
and its executors, administrators, successors and permitted substitutes
(including persons taking by novation) and permitted assigns. Such executors,
administrators, successors, permitted substitutes and permitted assigns shall be
entitled to enforce this Deed against the Guarantor.

First Home Loan Deposit Scheme – Deed of Guarantee Page 5


5.1.2. A Guarantee Certificate will expire, and the guarantee in respect of the
Scheme-Backed Loan described in that Guarantee Certificate will be released
without further action or notice, on the earliest of:
a. the date the Scheme-Backed Loan is repaid in full; and
b. subject to clause 5.1.3, the date the outstanding principal amount under the
Scheme-Backed Loan is less than 80% of the Value of the relevant Eligible
Property; and
c. the date the terms of the Scheme-Backed Loan or the related mortgage are
changed except where:
i. the change relates solely to the rate of interest and/or the manner in
which such rate is set or determined but only where the change is as a
result of:
A. an application from the relevant Individual Borrower or Borrower
Couple to change the rate of interest from a variable rate to a fixed
rate (and vice versa); or
B. the relevant Participating Lender changing the rate of interest
applicable to owner-occupied residential mortgage loans generally;
or
ii. the change is as a result of the relevant Participating Lender amending
its standard terms applicable to owner-occupied residential mortgage
loans generally (being a change that is not only applicable to borrowers
who have procured a Scheme-Backed Loan from that Participating
Lender); or
iii. where the change is made as a consequence of Borrower Hardship;
and
d. the date the relevant Participating Lender advances a further loan to the
relevant Individual Borrower or Borrower Couple which is secured by a
mortgage over the same Eligible Property (whose acquisition or
construction was funded by the Scheme-Backed Loan) except, in the case
of a construction loan, a progressively drawn loan contemplated in the
terms of the Scheme-Backed Loan as at the Loan Settlement Date; and
e. the date of the assignment or transfer of the Scheme-Backed Loan (or any
rights, obligations or interests in it or the mortgage securing it) occurs and
that assignment or transfer is not a Permitted Transfer; and
f. the date the Participating Lender notifies the Guarantor in writing that the
guarantee, in respect of the Scheme-Backed Loan described in the
Guarantee Certificate, may be cancelled or released.

5.1.3. For the purposes of clause 5.1.2.b, a Guarantee Certificate will not expire and
the guarantee, in respect of a Scheme-Backed Loan, will not be released in
circumstances where the outstanding principal amount under the Scheme-

First Home Loan Deposit Scheme – Deed of Guarantee Page 6


Backed Loan is less than 80% of the Value of the relevant Eligible Property due
to the proceeds of sale being applied to a Scheme-Backed Loan following
Enforcement of that Scheme-Backed Loan.

6. Limitations on the Guarantor’s liability


6.1.1. The Guarantor will not be liable under this Deed or otherwise:
a. in respect of any Payment Default and associated Guaranteed Liability if
the Guarantor has not received a claim by a Beneficiary that is made in
accordance with the Scheme Rules; or
b. in respect of any claim by a Beneficiary for, or in connection with, a
Guaranteed Liability that is the subject of a release of the guarantee under
this Deed in accordance with clause 5.1.2.

7. Preservation of Rights
7.1.1. The obligations of the Guarantor under this Deed are continuing obligations
despite any settlement of a claim in respect of a specific Guaranteed Liability.

8. Amendment and termination


8.1.1. The Guarantor may amend the terms of this Deed at any time at its discretion
by written notice of at least 20 Business Days to the Participating Lenders
provided that (except insofar as such amendment is required by law) such
amendment does not reduce the Guarantor's obligations to the Beneficiaries in
a manner which is prejudicial to the interests of the Beneficiaries in respect of
any subsisting Guaranteed Liability.

8.1.2. Subject to clause 8.1.3, this Deed continues until the earlier of:
a. the date of expiry or termination of the Scheme; and
b. the date the Guarantor terminates this Deed by written notice of at least 20
Business Days to the Participating Lenders,
(the Termination Date).

8.1.3. If a Guarantee Certificate is issued before the Termination Date, the guarantee
under this Deed in respect of the Guaranteed Liability relevant to that
Guarantee Certificate will continue to be valid after the Termination Date in
accordance with the terms of this Deed until such time as the relevant
Guaranteed Liability is released in accordance with clause 5.1.2.

9. Notices
9.1.1. Any notice or other communication under this Deed shall be given in
accordance with the Scheme Rules.

First Home Loan Deposit Scheme – Deed of Guarantee Page 7


10. Governing law
10.1.1. This Deed is governed by, and shall be construed in accordance with, and any
matter related to it is to be governed by, the laws of New South Wales.

First Home Loan Deposit Scheme – Deed of Guarantee Page 8


Executed as a Deed Poll.

Signatures
SIGNED SEALED AND DELIVERED for )
and on behalf of the National Housing )
Finance and Investment Corporation by: )

[Insert name] Signature

In the presence of:

Name of Witness Signature of witness

First Home Loan Deposit Scheme – Deed of Guarantee Page 9

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