Dáil Éireann Debate, Tuesday - 20 November 2018
658. Deputy Brendan Smith asked the Minister for Housing, Planning and Local Government his plans to lower the required deposit level for local authority house loans in view of the difficulties for potential applicants in achieving the required deposit; and if he will make a statement on the matter. [48036/18]
View answerThe Rebuilding Ireland Home Loan is designed to enable credit worthy first-time buyers, who are unable to access a mortgage from a commercial lender to obtain sustainable mortgage lending to purchase a new or second-hand property. 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.
Given the need to administer the loan in a financially prudent manner, in order to protect the financial position of both the borrower and the State, I have no plans to reduce this deposit requirement.
