Dáil Éireann Debate, Friday - 16 December 2016
218. Deputy Brendan Smith asked the Minister for Housing, Planning, Community and Local Government the number of local authority housing loan applications approved by each council in each of the years from 2010 to 2015 on an annual basis; his plans to enhance this loan scheme due to the difficulties persons are experiencing in having loan applications approved by financial institutions; and if he will make a statement on the matter. [40990/16]
View answerThere are currently two house purchase loan offerings available to lower - income first - time buyers from local authorities. The first is a standard annuity mortgage available from all local authorities. A first-time buyer unable to get a loan from a building society or a bank, may be eligible for a mortgage from the local authority concerned to purchase a new or second hand property or build their own home. The loan can be up to 97% of the price of the house subject to a maximum loan of €200,000. A local authority mortgage is an annuity mortgage with variable interest rates, so repayments will go up and down in line with interest rate changes. The relevant terms and conditions applying to local authority housing loans are set out in the Housing (Local Authority Loans) Regulations 2012. 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 previous year must be €50,000 or less and the combined gross income (before tax) of a two-income household in the previous year must be €75,000 or less. Prospective applicants should contact their relevant local authority for further information.
The second option is the Home Choice Loan which is available for first-time buyers to purchase a new or second-hand property or build their own home. The relevant terms and conditions applying to the Home Choice Loan are set out in the Housing (Home Choice Loan) Regulations 2009. Home Choice Loan provides up to 92% of the market value of a property purchased, subject to a maximum loan amount of €285,000. The loan is a normal capital and interest bearing mortgage which is repaid on a monthly basis. Home Choice Loan offers one variable interest rate. The rate is currently set at 3.25% variable, APR 3.30%. Further information is available at http://www.homechoiceloan.ie.
To support local authorities in operating their housing loan schemes in a consistent and efficient manner, the Housing Agency provides a central underwriting service to local authorities. The credit underwriting process considers the impact that family circumstances may have on the loan applicant’s capacity to make loan repayments. The final decision on loan approval is a matter for the relevant local authority and its credit committee on a case-by-case basis and in accordance with the relevant statutory Credit Policy that underpins the scheme and aims to ensure prudent lending.
The total number of new loans issued by local authorities under both schemes in the years 2010 to 2015 is set out in the table.
I will continue to keep the operation of both schemes under review.
|
Year |
No. of annuity loans issued |
€m |
No. of Home Choice Loans issued |
€m |
|
2010 |
69 |
7.4 |
6 |
1.206 |
|
2011 |
106 |
11.0 |
3 |
0.554 |
|
2012 |
149 |
14.7 |
5 |
0.776 |
|
2013 |
143 |
11.4 |
1 |
0.276 |
|
2014 |
171 |
13.1 |
2 |
0.318 |
|
2015 |
248 |
22.8 |
0 |
0 |
|
Total |
886 |
80.4 |
17 |
3.13 |
