Tuesday, 11 June 2019

Questions (1000)

Bernard Durkan


1000. Deputy Bernard J. Durkan asked the Minister for Housing, Planning and Local Government if credit will be given to applicants in rental accommodation when assessing their eligibility for Rebuilding Ireland home loans on the basis that they have already proven their ability to make repayments and that the deposit required by them be reduced accordingly; and if he will make a statement on the matter. [24302/19]

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Written answers (Question to Housing)

The 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.

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.

Given the need to administer the loan in a financially prudent manner, in order to protect the financial position of both the borrower and local authorities, I have no plans to reduce these deposit requirements.