The Mortgage to Rent (MTR) scheme introduced in 2012 is targeted at supporting households in mortgage arrears who are eligible for social housing support, whose mortgage has been deemed unsustainable by their lender under the Mortgage Arrears Resolution Process (MARP) and who have very limited options, if any, to meet their long-term housing needs themselve. The property must also meet certain eligibility criteria. One of the main criteria underpinning the MTR scheme is that it is a social housing option and therefore it is only open to borrowers in arrears who qualify for social housing as prescribed by the Social Housing Assessment Regulations 2011.
Applications for social housing support are assessed by the relevant local authority, in accordance with the eligibility and need criteria set down in section 20 of the Housing (Miscellaneous Provisions) Act 2009 and the associated Social Housing Assessment Regulations 2011, as amended. If a household has been deemed eligible for social housing support, it is a matter for the local authority to examine the suite of social housing supports available, to determine the most appropriate form of social housing support for that household.
The 2011 Regulations prescribe maximum net income limits for each local authority, in different bands according to the area concerned, with income being defined and assessed according to a standard Household Means Policy. The 2011 Regulations do not provide local authorities with any discretion to exceed the limits that apply to their administrative areas.
Under the Household Means Policy, which applies in all local authorities, net income for social housing assessment is defined as gross household income less income tax, PRSI, Universal Social Charge and Additional Superannuation Contribution. The Policy provides for a range of income disregards, and local authorities also have discretion to decide to disregard income that is temporary, short-term or once-off in nature.
The income bands are expressed in terms of a maximum net income threshold for a single-person household, with an allowance of 5% for each additional adult household member, subject to a maximum allowance under this category of 10%; and separately, an allowance of 2.5% for each child. The income bands and the authority area assigned to each band were based on an assessment of the income needed to provide for a household's basic needs, plus a comparative analysis of the local rental cost of housing accommodation across the country. It is important to note that the limits introduced in 2011 also reflected a blanket increase of €5,000 introduced prior to the new system coming into operation, in order to broaden the base from which social housing tenants are drawn, both promoting sustainable communities and also providing a degree of future-proofing.
Given the cost to the State of providing social housing, it is considered prudent and fair to direct resources to those most in need of social housing support. The current income eligibility requirements generally achieve this, providing for a fair and equitable system of identifying those households facing the greatest challenge in meeting their accommodation needs from their own resources.
However, as part of the broader social housing reform agenda, a review of income eligibility for social housing supports in each local authority area is underway. The review will have regard to current initiatives being brought forward in terms of affordable housing both for purchase and for cost rental.
Where MTR is not an option, it will be a matter for the borrower to discuss with their lender if there are other options available to resolve their mortgage arrears solution. The Abhaile service is a national mortgage arrears resolution service provided free of charge to the borrower and its aim is to help mortgage holders in arrears to find the best solutions and keep them, wherever possible, in their own homes. The Money Advice and Budgetary Service (MABS) acts as the gateway for the service and can be contacted by telephoning (076) 1072000 or by accessing their website at: www.mabs.ie/abhaile.
