Dáil Éireann Debate, Thursday - 21 October 2021
198. Deputy Joan Collins asked the Minister for Housing, Local Government and Heritage if he will review the unintended consequences of the EWSS and the impact it has on those seeking mortgages (details supplied). [51763/21]
View answerThe Rebuilding Ireland Home Loan (RIHL) scheme remains open for business. Local authorities are receiving and processing RIHL applications and are incorporating increased flexibility to accommodate applicants during the COVID 19 Pandemic.
As is the case with any lender, local authorities must lend mortgages on a prudent basis, taking into account the most recent income and employment data available. It would not be appropriate to lend when there is an identifiable risk that the person’s income and ability to pay might not return to the level required to support the borrowing requested. This is both for the protection of the lender and the borrower, in particular to seek to ensure that borrowers are not left with unsustainable debt burdens, given that a mortgage is a long-term commitment.
Where such persons are approved for an RIHL loan, draw down would not commence until their unsupported income post PUP/EWSS has returned to the level specified in the original application for a period of time, usually up to three months. This is line with the requirement to lend prudently.
This is not a blanket ban and local authorities can use their judgement and knowledge of local employers to advance loans to applicants before the end of this three-month period, where appropriate. This discretion was set out in Circulars 19 and 29 of 2020 and 9 of 2021.
There are further exceptions to this approach. In the case of a joint application where only one party is on PUP/EWSS, the application can also proceed to drawdown if repayment capacity can be assured based on the other person’s income. For applicants whose post PUP/EWSS income is lower (e.g. due to reduced hours) than stated on their application, their application can be re-assessed to determine the most appropriate borrowing amount for them.
In addition, persons currently on the PUP/EWSS can continue to apply for a RIHL mortgage based on their pre-PUP/EWSS Income. This will provide clarity to applicants regarding their eligibility for the loan amount and will enable them to commence the property search.
