The Rebuilding Ireland Home Loan, is targeted at first time buyers who wish to own their own home, have access to an adequate deposit and have the capacity to repay a mortgage, but who are unable to access a mortgage sufficient for them to purchase their first home.
The Housing Agency provides a central support service which assesses applications for the Rebuilding Ireland Home Loan on behalf of local authorities and makes recommendations to the authorities to approve or refuse applications. Housing Agency recommendations are then considered by the Credit Committee in each local authority, which issues loan approvals.
I understand that the Housing Agency has assessed 7,367 valid applications from February 2018 to end December 2020. Of these, it recommended 3,640 applications for approval and 3,727 applications be declined.
The most common reasons for a recommendation to decline are as follows –
- Repayment Capacity Not Demonstrated
- Net Income Ratio Outside of Policy
- Unsatisfactory Savings Record
- Unsatisfactory ICB Report
- Outside Credit Policy
- Income Sustainability Not Evident
- Unsatisfactory Financial Management
The final decision on loan approval is a matter for each local authority and its Credit Committee on a case-by-case basis. Decisions on all housing loan applications must be made in accordance with the statutory credit policy that underpins the Scheme, in order to ensure consistency of treatment for all applicants.
Loan applicants who are dissatisfied with a loan application decision of a local authority Credit Committee may appeal that decision to the local authority. Details of the appeals process can be obtained from the relevant local authority.
In general terms, there is no indication that the proportion of loans recommended for decline by the Housing Agency is excessive. A review of the Rebuilding Ireland Home Loan carried out by the Economic and Social Research Institute (ESRI) noted that the decision regarding credit assessment by the Housing Agency were "in line with the rejection rate data the ESRI collected as part of its Economic Sentiment Monitor for renter households who applied for a mortgage". While there are some differences in the data used in the comparison, this finding would not support the view that the rejection rate is excessive.
The ESRI report can be found at www.esri.ie/system/files/publications/RS104_4.pdf.