NAB was recently announced as the first major bank to take part in the scheme, which was promised by the coalition at the May election.

The scheme will allow low- and middle-income earners to get financing without having to save a large deposit, under a special government guarantee.

The two banks will receive at least half of the initial 10,000 guarantees allocated this financial year and begin offering guaranteed loans from January 1.

The 25 non-major lenders in the scheme will start offering guaranteed loans from February 1.

The scheme allows home buyers to only put down a five per cent deposit on the loans, with the National Housing Finance and Investment Corporation guaranteeing the rest of what would normally be a 20 per cent deposit.

The banks have agreed not to charge eligible scheme customers higher interest rates than equivalent customers outside of the scheme.

Among the 25 non-major lenders taking part are Bendigo Bank, Defence Bank, Bank Australia and Credit Union Australia.

CBA group executive Angus Sullivan said other action alongside the scheme was being taken to help homebuyers.

"The scheme will complement our existing home loan offering including our competitive products and services, including a two- and three-year 2.99 per cent fixed rate for new and existing customers, and market-leading technology, including our award winning mobile app," Mr Sullivan said.

CUA chief executive Paul Lewis said the scheme would build on his organisation's existing programs to help smooth the path to home ownership.

"As part of our focus on supporting first homebuyers, CUA is also involved in an innovative shared equity partnership with the National Affordable Housing Consortium, which is helping low- to middle-income workers gain access to the housing market," Mr Lewis said.

Assistant Treasurer Michael Sukkar said the scheme had been deliberately designed to ensure strong representation of smaller lenders on the panel.

"This will promote competition between the large and small banks, and ensure the scheme has broad geographic reach, including in regional and remote communities."

Bendigo Bank managing director Marnie Baker said the scheme would complement the bank's work on affordable housing including partnerships with HomesVic, Keystart, HomeShare Housing and Homesafe.

Australian Associated Press