Defence Home Ownership Assistance Scheme (DHOAS) Complete Guide 2025-26
A comprehensive guide for ADF members covering DHOAS eligibility, subsidy tiers, loan limits, and strategies to maximise your Defence Force home ownership benefits.
What is DHOAS?
The Defence Home Ownership Assistance Scheme (DHOAS) is a government initiative that supports eligible current and former members of the Australian Defence Force (ADF) to achieve home ownership by providing a monthly subsidy towards the interest component of an approved home loan.
Rather than a one-off grant, DHOAS pays into the loan account each month (if you meet the conditions) so that your repayments are lower or your interest cost is reduced.
Key Point: DHOAS is administered by the Department of Veterans' Affairs (DVA) on behalf of the Department of Defence.
Why DHOAS Matters for ADF Members
ADF service often involves postings, relocations and unique financial arrangements. DHOAS is a tailored support vehicle recognising the commitment of service personnel.
Because it reduces the interest cost on a home loan, it can improve your borrowing capacity or make owning your own home more achievable—especially valuable if you're balancing service commitments and family life.
Strategic Advantage: Understanding DHOAS early gives you an advantage—you can select a DHOAS-approved loan, meet timing conditions and ensure you capture the maximum benefit.
How DHOAS Works – Step by Step
Simple Overview
- 1Complete the required qualifying service
- 2Apply for a DHOAS Subsidy Certificate from DVA
- 3Take out a home loan with a DHOAS-approved lender and meet the scheme's conditions
- 4Each month, DVA pays a subsidy (based on your tier, loan size, balance etc) into the loan account
- 5Maintain eligibility and the subsidy continues until your service credit expires or you depart the scheme
Detailed Breakdown
Step 1: Qualify & Accrue Service Credit
- Permanent Force: Minimum of 2 years effective service required
- Reserve Force: Minimum of 4 years effective service (20 paid days each financial year) required
- Must have served on or after 1 July 2008 to be eligible
- You accrue "service credit" and milestones which determine your "tier"
Step 2: Apply for the Subsidy Certificate
- Apply via DVA for a Subsidy Certificate confirming your tier and entitlement level
- Provide service records and details of your loan intention
Step 3: Loan with Approved Lender & Meet Scheme Conditions
- Only declared home loan providers under DHOAS can be used
- Property must be your own home (occupancy requirements apply)
- If you refinance, change property, or move out of occupancy without permitted reason, you may jeopardise the subsidy
Step 4: Subsidy Calculation and Payments
- Monthly subsidy calculated based on: your tier, subsidised loan limit, and loan balance
- If loan balance ≥ subsidised loan limit, you receive maximum monthly subsidy for that tier
- Subsidy paid monthly directly to your loan (not as cash to your bank account)
Step 5: Maintain Eligibility & Conditions
- Continue to have service credit and meet occupancy/home-loan conditions
- Circumstances changes (stop occupying, sell home, non-approved refinance) may stop subsidy
- If you pause then restart, subsidy may be recalculated based on loan balance at restart
Subsidy Tiers, Loan Limits & Recent Changes
Subsidy Tiers & Loan Limits (2025-26)
| Tier | Minimum Service (Permanent) | Minimum Service (Reserve) | Subsidised Loan Limit |
|---|---|---|---|
| 1 | 2 years | 4 years | $413,690 |
| 2 | 4 years | 8 years | $620,535 |
| 3 | 8 years | 12 years | $827,380 |
Estimated Maximum Monthly Subsidies (based on October 2025 median interest rate):
- • Tier 1: Up to $471/month
- • Tier 2: Up to $706/month
- • Tier 3: Up to $942/month
How the Loan Limits Are Calculated
The subsidised loan limits are set as a proportion of the national average house price (AHP):
- Tier 1: 40% of AHP
- Tier 2: 60% of AHP
- Tier 3: 80% of AHP
For 1 July 2025, the AHP was $1,034,225, which underpins the 2025-26 limits.
Recent Changes Worth Noting
- The 2025-26 limits represent an increase, reflecting higher average house prices in Australia
- From 1 January 2023: minimum qualifying periods reduced (Permanent 4→2 yrs; Reserve 8→4 yrs)
- Restrictions on veterans accessing the scheme were eased
- Monthly subsidy amounts fluctuate as the median interest rate changes
Key Conditions & Things to Watch
Occupancy Requirement
The home must be your suitable own home (you must occupy it) to qualify. If you change circumstances (move out, rent it out, etc.) you may lose subsidy.
Loan Balance Timing
The subsidy is calculated on the loan balance at the time of your first subsidy payment, up to the subsidised loan limit. If you pay down the loan (or delay the first payment) you may reduce your subsidy.
Changing Loans/Lenders
If you refinance or change to a non-approved lender, you may forfeit your subsidy eligibility or have to re-apply under new terms.
Service Credit Expiry
You must maintain a service credit and meet conditions. If you lose that service credit (e.g., leaving ADF without meeting conditions) the subsidy may cease.
Cap and Above-Cap Loans
If your loan is significantly higher than the subsidised loan limit, only the portion up to the limit receives subsidy. Any excess is unsupported.
Lump-Sum Option
In some circumstances you may convert part of your subsidy period into a one-off lump sum payment toward your loan. Discuss with your loan provider.
Practical Checklist & Tips
For ADF Members Planning to Buy
Confirm your service record: Check how many effective years you have and whether you're eligible for Tier 1, 2 or 3
Apply for your Subsidy Certificate early: Get it from DVA before making significant home-loan decisions
Choose a DHOAS-approved lender: Many mainstream lenders offer special DHOAS versions
Budget with the subsidy in mind: Understand what portion of your loan will be subsidised
Plan for postings/relocations: Ensure the property qualifies as your "own home" under scheme rules
Before refinancing: Check how this may impact your DHOAS subsidy
Consider the subsidised loan limit: Review whether staying within the limit maximises your benefit
Keep documentation: Service records, subsidy certificate, loan documents, occupancy evidence
Stay updated: Subsidised loan limits and monthly subsidies change annually based on house prices and interest rates
Frequently Asked Questions
Q: Do I receive cash into my bank account?
A: No. The subsidy is paid directly into your approved home-loan account (via your lender) and reduces your interest cost.
Q: Can I still use DHOAS if I've already got a home loan?
A: You can, but only if the home loan is with a declared DHOAS provider, meets the conditions of the scheme, and you apply for and receive the Subsidy Certificate before you draw down or settle (or as required by rules). Changing a non-approved lender into a DHOAS loan can be more complex.
Q: What happens if I refinance or increase my loan after receiving subsidy?
A: If you refinance to a non-approved lender or the structure no longer meets DHOAS criteria, you may lose eligibility. If you increase your loan, only the portion up to the subsidised loan limit is considered. If you pause or restart the subsidy, the new loan balance at restart may apply.
Q: What if I don't stay in the home I've bought (e.g., posted elsewhere)?
A: DHOAS requires occupancy as a "suitable own home". If you rent it out or move, check whether this triggers a cessation of subsidy. You may be able to pause/subsequently resume, but conditions apply.
Q: Is it still worth using DHOAS with rising house prices / interest rates?
A: Yes—especially for ADF members, because the subsidy reduces interest cost, which helps when borrowing is tighter. However, you must assess your individual situation: your tier, loan amount, housing market and mobility (postings) all matter.
Summary
For current and former ADF members, DHOAS is a strong support tool in the home-ownership toolkit. The longer you serve, the more you can access via a higher tier and greater subsidy.
Key steps you should not delay: Check your service record, apply for your subsidy certificate, select the right lender and loan product, and understand how the subsidised loan limit applies.
With the new 2025-26 figures now published and house-price limits rising, it's a timely moment to review whether DHOAS is right for your home-ownership plan.
How Firm Foundations Property Can Help: We assist you navigate your DHOAS eligibility, connect you with approved lenders, and align your home-buying strategy with your service commitments, posting schedule and long-term goals.
Disclaimer: Information in this guide is general only and does not constitute financial or legal advice. You should consider your personal circumstances and consult with a qualified adviser before proceeding.