The Federal Government will offer grants of $25,000 for Australians to build a new home or start a major renovation.
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The $688 million HomeBuilder program aims to build 30,000 homes by Christmas.
Treasurer Josh Frydenberg said the package would stimulate the economy, which has dipped into a recession for the first time in three decades.
"There is a real hole in the housing sector as a result of the coronavirus," Mr Frydenberg said.
To access the scheme, owner-occupiers must enter into a building contract between June 4 and December 31, 2020.
The grant will be awarded to those building a new home as a principal place of residence, where the value of house and land does not exceed $750,000.
HomeBuilder grant will also apply to renovation contracts of between $150,000 and $750,000, where the value of the existing house and land does not exceed $1.5 million.
Applicants must meet an income test, where an individual applicant's income cannot be greater than $125,000 per year, or $200,000 for couples, based on 2018-19 tax returns or later.
Senator for Victoria Sarah Henderson said the HomeBuilder grant will help people realise their home ownership dream.
"HomeBuilder program will deliver a major boost for home buyers and renovators across regional Victoria," Senator Henderson said.
The program has drawn sharp criticism from Bendigo MP Lisa Chesters.
"When the government started to talk up their package, I was hopeful and had an open mind," Ms Chesters said.
"I am concerned the $150,000 price tag for renovations will lockout a lot of people from Bendigo and the region from investing."
Ms Chesters said $25,000 for new home builds will be welcomed by developers and those building on the outer fringes of Bendigo.
"It doesn't help our regional towns that don't have those growth corridors like Castlemaine and Kyneton," she said.
The official body of Australia's home building industry, the Housing Industry Association, welcomes the new stimulus package.
"The price points inserted into the package indicates the program will be attractive to regional home buyers," executive director Fiona Neeld said.
"There's more than one million people directly engaged in the building industry and we hope all of those businesses will benefit from the activity home building brings."
Todd Newman Builders specialises in set plan, customised and luxury homes.
Mr Newman said the HomeBuilder program gives new home builders a lot of confidence.
"The program price limit covers most house and land builds in Bendigo and central Victoria," he said.
