I propose to take Questions Nos. 583 and 588 together.
The new Rebuilding Ireland Home Loan Scheme is designed to enable credit worthy first-time buyers to access sustainable mortgage lending to purchase new or second-hand properties. The low rate of fixed interest associated with the Rebuilding Ireland Home Loan provides first-time buyers with access to mortgage finance that they may not otherwise have been able to afford at a higher interest rate.
To support prudential lending and consistency of treatment for borrowers, a Loan to Value ratio of 90% applies to the Rebuilding Ireland Home Loan as per the Central Bank's prudential lending guidelines. Therefore, in order to avail of the loan, applicants must have a deposit equivalent to 10% of the market value of the property.
Applicants must provide bank or similar statements (such as post office, credit union etc.) for a 12-month period immediately prior to making an application, clearly showing a credible and consistent track record of savings. The cash savings should be no less than 3% of the market value of the property. Gifts are permissible up to 7% of the market value of the property, where their source is verified.
Exceptions to the above can be made where an applicant/applicants can clearly demonstrate a consistent and credible record of savings or rent payment through their bank account which at a minimum is equal to:
- In the case of a fixed rate loan, the proposed monthly loan repayment, or
- In the case of a variable rate loan, the proposed stress-tested monthly loan repayment.
For prospective purchasers of newly-built properties, the availability, through the Revenue Commissioners, of the Help to Buy Initiative for first-time buyers may provide additional assistance to prospective applicants for the Rebuilding Ireland Home Loan.
Regarding the information available to prospective applicants on the Rebuilding Ireland Home Loan website, I am aware of issues concerning the inclusion of the specific deposit requirements on the website. I have recently met with the Chief Executives of the two main agencies involved in the implementation of the scheme, the Housing Agency and the Housing Finance Agency, and I have requested that they address a number of issues to improve the operation of the scheme, including the provision of additional information on-line in relation to the deposit requirements of the scheme. This will give potential applicants a clearer indication of the deposit amount that they are required to have under the terms of the scheme.