DHOAS and ADF home loans from a Defence mortgage broker who has served

What is DHOAS?

The Defence Home Ownership Assistance Scheme (DHOAS) is an Australian Government scheme that pays a monthly subsidy towards the interest on your home loan. For many Defence families it is the single most valuable entitlement they have.

The subsidy is set by a formula the scheme publishes, not by your lender: 37.5% of the median interest expense on the subsidised portion of your loan, over a notional 25-year loan, regardless of your actual loan term or rate. DVA reviews the median figure monthly, so the amount moves a little over time. Because the scheme owns the formula, the subsidy is identical no matter which approved provider writes the loan.

To use it you apply for a subsidy certificate, take out the loan with one of the scheme's approved home loan providers, then authorise the subsidy to start once you are occupying the home. The official rules and forms are at dhoas.gov.au.

Subsidy tiers and subsidised loan limits

DHOAS runs on three subsidy tiers tied to your length of effective service. The tier does not change the formula. It changes the subsidised loan limit, the maximum portion of your loan the subsidy is calculated on. Each limit is a fixed share of the Average House Price, a figure the Minister for Defence determines on 1 July each year from Australian Bureau of Statistics data: 40% for tier 1, 60% for tier 2, 80% for tier 3.

Figures as at FY2026-27, based on an Average House Price of $1,139,055 determined as at 1 July 2026. Source: dhoas.gov.au, subsidised loan limits and service milestones and subsidy tier levels. Last reviewed 02-09-2026. The limits are reviewed every 1 July.

If your loan is above the limit

The subsidy is only ever calculated on the subsidised portion, which is your loan balance capped at your tier's limit. Borrow above the limit and the extra earns no subsidy, so past that point the subsidy stops being part of the maths.

One detail people miss: the limits that apply are the ones current in the month your first subsidy payment covers, and they stay with that loan for its life. Later annual increases do not lift a loan already being paid, which makes the timing of your first payment worth a conversation. Our DHOAS subsidy calculator uses the scheme's own formula, so you can see what a tier or a loan size actually does.

Eligibility, qualifying service and how your entitlement builds

Two separate clocks run in DHOAS, and confusing them is the most common mistake we see.

The first is the qualifying period, the service you must complete before you are eligible at all: two consecutive years for Permanent members, or four years of effective Reserve service in consecutive financial years, where an effective year means at least 20 days of paid service. Reservists can shorten the wait with more than six months of Continuous Full-Time Service, which counts as an extra year towards the four.

The second is your service credit, which sets how long the subsidy can be paid, and it only starts building after the qualifying period is done. Permanent members accrue one month of entitlement for each month of effective service; Reservists accrue one year for each effective financial year served after qualifying. Credit is capped at 20 years, or 25 with warlike service, counting any DHOAS, Defence Home Owner Scheme or Defence Service Homes assistance already used.

Warlike service adds to that second clock only, between two and five years of extra credit depending on the length of the deployment. It does not lift your tier and it does not shorten the qualifying period. Breaks in service, re-enlisting and transfers between Permanent and Reserve service all change the arithmetic (dhoas.gov.au).

Left the ADF? You may still be entitled

DHOAS does not end at your separation date. If you completed the qualifying period and still hold service credit, you can use it after you leave. Three rules shape what that looks like.

• One certificate. After separation only one more subsidy certificate can be issued, and a certificate is valid for 12 months with no extension. Some members apply before separating so the post-separation one stays in reserve.
• Your tier can drop. With 20 or more years of service at separation the subsidy is paid at the tier 3 level. Without that history it is paid at the tier 1 level, even if you held a higher tier while serving.
• Credit stops growing. You keep what you accrued, but no more accrues once you are out.

Different rules apply if you were medically separated for a condition DVA has accepted liability for. You can be assessed as a DHOAS Incapacitated Member, in which case the usual qualifying period does not apply and a minimum service credit is set instead, based on your service records and medical transition documents (dhoas.gov.au). If you discharged recently and never used your entitlement, that single remaining certificate is worth planning rather than spending by accident. Talk it through with us first.

Stacking DHOAS with other help

DHOAS is a subsidy paid into a loan, so it generally sits alongside other assistance rather than replacing it. Depending on where you are in your career you may also be able to use:

• HPAS, the Home Purchase Assistance Scheme, a one-off Defence payment when you buy in your posting location. It is for members on continuous full-time service, the location must stay your housing or family benefit location for at least a year, you have to occupy the home, and where you buy with someone else the payment reflects your share of ownership (PACMAN chapter 7, part 3).
• HPSEA, the Home Purchase or Sale Expenses Allowance, which covers eligible costs of buying or selling a home when you are posted. Same chapter of PACMAN, different division.
• The Australian Government 5% Deposit Scheme, the Commonwealth's low-deposit pathway, formerly the Home Guarantee Scheme. Eligible first home buyers can buy with a minimum 5% deposit and no lenders mortgage insurance, or 2% for eligible single parents. housingaustralia.gov.au also covers the First Home Super Saver Scheme and Help to Buy.
• State first home concessions. Queensland runs a home concession, a first home concession, a first home (new home) concession and a first home vacant land concession, each with its own test (qro.qld.gov.au). Run your numbers with our stamp duty calculator.

Used in the right order these change what you can buy and when. Missed entirely, they leave real entitlements unclaimed.

Defence Service Homes loans, and how they differ from DHOAS

Veterans often ask which Defence housing scheme they fall under, and the dividing line is when your service started. Defence Service Homes (DSH) loans are made under the Defence Service Homes Act 1918 and are generally available where your first service in the defence forces began before 15 May 1985, with a narrow exception for members allotted for service in Namibia. If your first service began on or after that date, DSH is closed to you and DHOAS is the scheme to look at.

They also work differently. A DSH loan is an actual subsidised loan, provided by one bank under an agreement with the Commonwealth, with a maximum loan of $25,000 over a maximum term of 25 years, usually secured by a first mortgage (dsh.gov.au). DHOAS is not a loan at all, it is a monthly subsidy paid into a loan you take out with an approved provider. A DSH loan rarely buys a home on its own today, so it is usually one part of a larger structure.

How lenders read Defence and veteran income

Serving and ex-serving income does not look like a standard payslip, and that is where good applications come unstuck. Defence pay can include base salary plus service allowance and other allowances. A veteran's income can include Department of Veterans' Affairs payments such as the Service Pension, Disability Compensation Payment, incapacity payments, the Special Rate Disability Pension or the Veteran Payment, alongside a Commonwealth Superannuation Corporation pension under MSBS, DFRDB or ADF Super.

Lender treatment varies, and more than most people expect. Some assessors take an allowance in full, some shade it, some want it evidenced over a longer period, and non-taxable payments are handled differently again. We do not publish any lender's credit policy here, because policy changes and yours is the only one that matters.

What we bring is knowing which lenders assess Defence and veteran income consistently, and matching you to them before the file goes near a credit team. We also know which document proves what. A CSC entitlement letter, for example, is what most assessors need, and a transaction summary from the same portal usually is not.

Occupancy, postings and renting the home out

The main condition on the subsidy is occupancy. You, or one or more of your dependants if you are away, need to occupy the home for 12 months from the date payments start, and you need to be occupying it and holding a valid certificate before payments can begin at all. Postings are handled, but only if you get in front of them:

• Posted after you move in. If you occupied the home in good faith expecting to stay the 12 months and are then posted, the subsidy can continue. Lodge a Change of Circumstances form with your posting order before you move. Lodge it afterwards and payments can be suspended or ceased, and overpayments recovered.
• Posted before you move in. If you already know you will relocate within the year, you can receive the subsidy until you vacate, but leaving early means the 12-month condition is not met.
• After the 12 months. You can rent the property out and keep the subsidy, as long as the DHOAS loan stays current. The tax treatment of that is a question for a registered tax agent.

Other conditions catch people out. A DHOAS loan can only buy, build, renovate or refinance your own home, so no investment purchases and no lines of credit. The subsidy runs on one loan over one property at a time, though the entitlement can transfer to a new property with a new loan and a fresh 12-month occupancy period. And if a loan with redraw is paid to a nil or credit balance at any point, payments cease, because the purpose of the loan is treated as changed (dhoas.gov.au).

Building a home with DHOAS

You can use DHOAS on a construction loan, and there is a real choice about timing. Start the subsidy after the first drawdown and lift it after each later drawdown with a Change of Circumstances form, or hold off until the loan is fully drawn so it is calculated on the full balance. Neither shortens how long you can be paid, because that is set by your service credit, not by a start date. Starting early spends part of your entitlement while the balance is small; starting late means no subsidy during the build. If you have separated and are building, the scheme notes you may want to defer that one post-separation certificate until construction finishes.

Land and construction loans can both attract the subsidy, separately or combined (dhoas.gov.au). See our construction and new build loans page for how the lending works stage by stage.

How we help

• We confirm your tier, your service credit position, the certificate steps and the timing, in plain English.
• We hold accreditation with an approved DHOAS home loan provider, so your application can be lodged through us. We also compare the wider panel of 75 lenders, because sometimes the best structure uses both.
• We match Defence and veteran income to lenders that assess it consistently, and tell you which documents to get.
• We plan around service life: posting cycles, deployments, occupancy rules and renting the home out later.
• We map the other entitlements, HPAS, HPSEA, the low-deposit scheme and state concessions, before we talk products.

Our service is free to you: brokers are paid by the lender when your loan settles. And if DHOAS is not the right fit for your situation, we will tell you straight.

Posted anywhere in Australia? We work the same way

Everything is done by phone, WhatsApp, video and e-signature, so we help members posted to Gallipoli Barracks in Enoggera, RAAF Base Amberley, Lavarack Barracks or RAAF Base Townsville, Robertson Barracks in Darwin, HMAS Cerberus (Flinders Naval Depot), Puckapunyal, Holsworthy, Kapooka, RAAF Base Williamtown, RAAF Base Edinburgh or HMAS Stirling, without anyone needing to visit an office. Posted mid-purchase? We have handled that before. Defence families settling on the Sunshine Coast or building a new home get the same service, and you can estimate your DHOAS subsidy before we talk.