Dáil Éireann debate -
Wednesday, 19 May 1993

Vol. 431 No. 1

Written Answers. - Local Authority Loans.

Bernard J. Durkan

Question:

87 Mr. Durkan asked the Minister for the Environment the extent, if any, to which regulations have been amended pertaining to local authority loans issued from 1981 to 1987 by the local authority as agents for the housing finance agency; and if he will make a statement on the matter.

Minister of State at the Department of the Environment (Mr. Stagg)

Following is a summary of the principal changes to the conditions governing income-related loans approved by local authorities acting as agents of the Housing Finance Agency, up to 30 June, 1986, when such arrangements were terminated:—

Date of notification to local authority	Change in conditions
31 March, 1983	Income limit increased from £9,000 to £10,000 with effect from 6 April 1983.
	Clarification of procedure for dealing with overtime earnings, three year averaging of overtime introduced.
	Previous owners considered in special circumstances.
	Application fee increased to £20.
29 June, 1983	A variable interest rate margin (to be added to inflation rate when determining interest rate) was introduced at 4.25 per cent with effect from 1st July, 1983. A fixed margin of 3.25 per cent added to inflation operated up to that date.
26 October, 1983	New mortgage deed issued.
	Where a local authority fails to notify a borrower of revised monthly repayment after the year end the existing repayment stands.
	Set out procedures relating to principal earner on marriage of borrower after completion of mortgage.
	Early repayments of £1,000 or more qualify for interest credit.
	Transfer of mortgage to another person permitted provided transferee qualifies for loan under conditions of scheme.
1 March, 1984	Following suspension of Certificate of Reasonable Value system, the value of new houses to be determined in accordance with Article 34 of the Housing Regulations, 1980.
6 April, 1984	Gross income for purposes of determining loan may be current year's estimated gross income (rather than gross income in previous tax year) in certain circumstances.
	Where a person previously owned a house a loan may be granted in exceptional circumstances without any waiting period.
4 November, 1984	Variable interest rate margin increased to 5 per cent.
	Repayment on new loans increased to 20 per cent of the principal earner's gross income in previous income tax year.
25 January, 1985	Calculation of maximum loan set out where borrower qualified for the £5,000 “surrender” grant.
1 January, 1986	Variable interest rate margin increased by ¼ per cent to 5¼ per cent.
5 June, 1987	Deed of Variation introduced giving borrowers the option to repay loans on an annuity basis.
1 August, 1987	Variable interest rate margin increased to 5.75 per cent.
12 February, 1988	Variable interest rate margin increased to 7.6 per cent.
1 July, 1988	Variable interest rate margin reduced to 5.75 per cent.