Dáil Éireann Debate, Thursday - 23 June 2016
151. Deputy Michael McGrath asked the Minister for the Environment, Community and Local Government the interest rate that now applies to local authority mortgage loans; the efforts his Department and individual local authorities are making to market this loan scheme; and if he will make a statement on the matter. [17858/16]
View answer152. Deputy Michael McGrath asked the Minister for the Environment, Community and Local Government the eligibility conditions that apply, by way of household income and so forth, of the local authority mortgage loan scheme; and if he will make a statement on the matter. [17859/16]
View answerI propose to take Questions Nos. 151 and 152 together.
With effect from 1 July 2016, a cut of 0.25% will be applied to the variable mortgage interest rate charged to local authority borrowers. This cut will reduce the current variable rate of 2.55% to 2.30%. The interest rate applied to the Home Choice Loan scheme has also been reduced from that date, from 3.5% to 3.25%.
Further information in relation to this interest rate cut is available at:
http://www.environ.ie/minister-coveney-welcomes-reduction-variable-interest-rates-local-authority-mortgage-holders.
Information on local authority loans is publically available on the websites of:
local authorities at:
http://www.environ.ie/local-government/administration/local-authorities/links-local-authority-websites;
the Citizen Information Board at:
http://www.citizensinformation.ie/en/housing/owning_a_home/help_with_buying_a_home/local_authority_mortgages.html;
and on my Department’s website at:
http://www.environ.ie/housing/grantsfinancial-assistance/local-authority-loans/local-authority-loans.
The Housing (Local Authority Loans) Regulations 2012 prescribes, in detail, the terms and conditions applicable to local authority housing loans. Key eligibility criteria provide that a loan applicant must be a first time buyer and must be able to show their local authority that they cannot get a loan from a bank or building society. Also, the gross income (before tax) of a single income household in the last year must be €50,000 or less and the combined gross income (before tax) of a two income household in the last year must be €75,000 or less.
In 2009, a Credit Policy, in accordance with the Housing (Local Authority Loans) Regulations 2009, was issued to all housing authorities. Decisions on all housing loan applications must be made in accordance with this statutory Credit Policy in order to ensure prudence and consistency in approaches.
All applicants must complete a housing loan application form which can be downloaded from the relevant local authority’s website. As part of the loan application procedure, the Housing Agency provides an underwriting and support service to all local authorities. This shared central service processes loan applications, carries out credit checks and issues a recommendation to the local authority on each loan application in accordance with the credit policy. The final decision on loan approval is a matter for each local authority and its credit committee on a case-by-case basis. Accordingly, the local authority issues the loan and the Housing Agency provides an underwriting and support service to the local authority during the loan application process.
