Summary:
Western Australia has just launched one of the most accessible construction loans in the country – a new government-backed product that allows home buyers to build with just a 2% deposit and $400 monthly payments during the build. The loan is tailored specifically for modular homes and could reshape housing affordability and builder finance across the state.
A small deposit and a big opportunity for first-home buyers
In a move that could significantly open up access to new homes, the WA Government has announced a new low-deposit loan product as part of its upcoming 2025–26 budget.
Available exclusively for modular homes, the Keystart-administered loan requires just a 2% deposit and keeps construction payments to a manageable $400 per month while the home is being built. For aspiring homeowners struggling to balance rising rents and savings goals, it’s a major breakthrough.
For builders, especially those working in prefabrication, it’s a sign that the government is ready to back innovation in delivery and finance.
Fixing finance for off-site builds
While modular construction offers speed, quality control, and growing consumer appeal, access to finance has long been a roadblock.
Traditional construction loans rely on on-site milestones to release progress payments. That doesn’t suit modular builds, where much of the work is completed off-site in a factory. Buyers have often been left funding significant portions of the build upfront or missing out entirely.
This new loan is structured differently. Up to four progress payments will be available during the off-site construction phase, providing certainty to builders and reducing stress for clients.
$400 monthly build payments ease pressure on renters
The new Keystart product also considers how difficult it can be to fund a new build while juggling rent or other living expenses.
Capped at $400 per month throughout the construction phase, the repayment model is designed to reduce that double burden and make the path to ownership more manageable. The result is a more inclusive, predictable, and transparent homebuilding experience.
Only a handful of options like it exist in Australia
With only a small number of loans on the market catering specifically to prefab homes, WA’s new offering stands out. Commonwealth Bank made headlines earlier this year by tweaking their loan structure for prefabricated builds, but WA’s Keystart loan goes a step further – dramatically lowering the deposit requirement and ensuring builder cash flow during off-site work.
Eligible buyers will need to build with a Keystart-approved modular builder to access the scheme.
Industry welcomes the innovation
Keystart CEO Mark Tomasz said the product was designed to give Western Australians a better shot at building.
“We’ve worked closely with the industry to design something that works for modular. This is about making home ownership more accessible without compromising on build quality,” Tomasz said.
Real Estate Institute of Western Australia president Suzanne Brown also praised the initiative, noting, “Innovative solutions like this are needed to help build affordable new homes across the state.”
The Good Builder take
This isn’t just a housing policy – it’s a signal to the entire construction industry. Finance structures are evolving, and builders who adapt to models like this will be best placed to serve the next wave of home buyers. Modular construction is no longer a fringe category. It’s moving mainstream – and now the finance is finally catching up.
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