The $500 million scheme, which is built upon several pilot schemes run by the Victorian government, is expected to assist over 3,000 Victorians buy a home.

However the list of eligible locations for the scheme, announced Friday October 8, did not include Stawell, Ararat, Hamilton or any town in the region, leaving many questioning the choice.

Terry Monaghan, who has been selling homes in the region for 47 years, said it was an "absolute disgrace" and that he was lost for words.

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"This is just government discrimination against certain areas, and for what reason?" Mr Monaghan said.

"Ararat, Pomonal and Stawell are all growth areas, they're all going really well.

"They're all areas where it's getting more and more difficult for younger people to buy houses; you would think in places that have got that kind of growth, that's where the government would be helping out."

"(But) you've got Hawthorn, you've got Toorak, you've got South Yarra, you've got Brighton."

Under the scheme, eligible homebuyers would have the option of receiving a contribution of up to 25 per cent towards the purchase price of their property, reducing their minimum required deposit to 5 per cent and avoiding the need to pay Lenders Mortgage Insurance.

The Victorian Homebuyer Fund is a shared equity scheme, meaning that the government's financial contribution would be made in exchange for a share, or proportional interest in the property.

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A spokesperson for the Victorian government said the government had based its selection of available locations on areas with higher populations, forecast population growth and "healthy property markets".

However, it was noted the list of eligible regional locations may be expanded over time.

According to the spokesperson, eligible locations included in the Victorian Homebuyer Fund have been chosen using a range of factors with a focus on supporting purchases in large population centres and medium-sized towns.

Mr Monaghan said the oversight didn't make sense, as towns equivalent to Stawell and Ararat, or smaller, made the cut.

"It's just nonsensical based on my experience," he said.

"If you wanted to buy a house in Stawell, or you wanted to buy a house in Moe, you're assisted to buy one in Moe, but not in Stawell.

"Does it imply that they think our real estate is more affordable, and buyers don't need assistance?

"If our prices were going down and places were getting cheaper you could say 'yeah it's an area that's going backwards, but it's not; it's ripping forward."

"A couple of years ago you could buy a reasonable house in Stawell for about $200,000, now it's $400,000."

More information about the Victorian Homebuyers Fund can be found on the government's website.

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