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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

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

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

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

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

RFP for the establishment of a panel of lenders for the First Home Loan Deposit Scheme (FHLDS) Page 1

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

http://www.treasury.gov.au/consultation


• 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.


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: [email protected]

Deed of

Guarantee

the document set out in in Schedule 4 to this RFP

mailto:[email protected]


Deadline for

Submission of

Respondents’

Questions

For the Major Bank Lenders sub-panel:

4pm Sydney time on Monday 4 November 2019

For the Non-Major Bank Lenders sub-panel:

4pm Sydney time on Tuesday 12 November 2019

Investment

Mandate

the National Housing Finance and Investment

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

Lender Deed

the document set out in draft terms in Schedule 3

Respondent any entity which lodges a Submission or, where the

context requires, is proposing to lodge a Submission

Response

Forms

the RFP Response Forms set out in Schedule 2

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.

http://www.treasury.gov.au/consultation


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:

[email protected]

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

https://www.nhfic.gov.au/

mailto:[email protected]


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.


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


6. Policy and law

6.1. Ethical dealing

6.1.1. Respondents must not:


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.


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.


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:


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;


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.

https://www.nhfic.gov.au/media/1125/complaints-mechanism-public-version.pdf

https://www.nhfic.gov.au/media/1125/complaints-mechanism-public-version.pdf


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,


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


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.


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.


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;


• 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

home buyers

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

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

properties

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

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.


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


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:


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


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:

— însert 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 însert day^ day of însert month^ 2019


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


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


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.


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.


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:


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.


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:


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.



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.



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


SCHEDULE 3 DRAFT PARTICIPATING LENDER DEED AND SCHEME RULES

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

First Home Loan Deposit Scheme

Template Document


What is this document usually 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 related to it?

- Deed of Guarantee – provides for a contractual guarantee (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.

Why is this template document available?

This template document is provided for the purposes of the Request for 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 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.



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

43259467_12 Participating Lender Deed

i

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


ii

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



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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

Lender[s]

Name [●]

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

[●]



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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).


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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);


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(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);


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(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;


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(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.]


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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.


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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.


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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:


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(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:


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(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


12

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;


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(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.


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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


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(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


16

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.


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(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.


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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


19

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


20

(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;


21

(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.


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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


23

(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.


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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 25

Schedule Appointment Terms

Part 1 – Standard Terms

Authorised Person (Participating Lender)

An officer performing the role of [insert position title or role 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 Manual

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



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Signing page

NHFIC / Participating Lender(s) [Execution blocks will be inserted]

First Home Loan Deposit Scheme Template Document

Scheme Rules


Scheme Rules.

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.


- Participating Lender Deed – provides an overall framework for the 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 available?

This template document is provided for the purposes of the Request for 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.


Scheme Rules

Dated [1 January 2020]

National Housing Finance and Investment Corporation

Scheme Rules

44168514_15 Scheme Rules Current as at [1 January 2020]

i

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

Scheme Rules


ii

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

Scheme Rules

44168514_15 Scheme Rules Current as at 1 January 2010

1

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.


2

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].


3

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:


4

(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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(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);


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(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”).


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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


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(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:


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(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,


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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


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(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


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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.


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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.


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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:


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(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


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(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.


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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;


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(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:


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(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:


20

(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


21

(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:


22

(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:


23

(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.


24

(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.

Scheme Rules


25

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 Territory

[All postcodes]

New South Wales – capital city and regional centre

Capital city

[postcodes]

Regional centre – Newcastle and Lake Macquarie

[postcodes]

Regional centre – Illawarra

[postcodes]

New South Wales – other (including Jervis Bay and Norfolk Island)

[postcodes]

Victoria – capital city and regional centre

Capital city

[postcodes]

Regional centre – Geelong

[postcodes]

Victoria – other [postcodes]

Queensland – capital city and regional centre

Capital city

[postcodes]

Regional centre – Gold Coast

[postcodes]

Regional centre – Sunshine Coast

[postcodes]


26

Area Relevant postcodes

Queensland – other [postcodes]

Northern Territory [All postcodes]

South Australia – capital city

[postcodes]

South Australia – other

[postcodes]

Western Australia – capital city

[postcodes]

Western Australia – other (including Christmas Island and Cocos (Keeling) Islands)

[postcodes]

Tasmania – capital city

[postcodes]

Tasmania – other [postcodes]

Scheme Rules


27

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.


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.


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.


Scheme Rules


28

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.]

Scheme Rules


29

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.]


SCHEDULE 4 DEED OF GUARANTEE

The draft Deed of Guarantee follows after this page.


Proposed Document

Deed of Guarantee in respect of the First Home Loan Deposit Scheme


Deed of Guarantee or Guarantee.

Who enters into this document?

This document is a deed poll made by National Housing Finance and Investment 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 cover?

- Effective date and termination of guarantee.

- 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.


- Scheme Rules – establishes certain capacity, participation and eligibility criteria 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 available?

This document is provided in connection with the Request for 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 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

First Home Loan Deposit Scheme – Deed of Guarantee Page i

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 1

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.


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

Couple

has the meaning given in the Scheme Rules.

Borrower

Hardship


Business Day means a day (excluding Saturday and Sunday) on which

banks are generally open in Sydney.

Claims

Procedures

means the procedures for making a claim in respect of a

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

Certificate

means a certificate issued in accordance with this Deed

and the Scheme Rules to evidence the registration of a

Scheme-Backed Loan in the Register.

Guaranteed

Liability

has the meaning given in clause 2.1.1.

Guaranteed

Maximum

Liability

means, in respect of any Scheme-Backed Loan, the

amount designated as the “Guaranteed Maximum

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

Borrower


Loan Settlement

Date



Participating

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

Transfer


Register has the meaning given in clause 4.1.1 of this Deed.

Scheme-Backed

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;


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.


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.


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-


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.


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.


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