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Housing Policy

Dáil Éireann Debate, Thursday - 11 November 2021

Thursday, 11 November 2021

Questions (83)

Rose Conway-Walsh

Question:

83. Deputy Rose Conway-Walsh asked the Minister for Housing, Local Government and Heritage if he will ensure that persons who have been through a separation or divorce and or have been denied a mortgage on medical grounds have adequate access to the Rebuilding Ireland home loans; and if he will make a statement on the matter. [55200/21]

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Written answers

As with the previous local authority loan offerings, the Rebuilding Ireland Home Loan is currently available to first-time buyers only. This is set out in the regulations governing the Scheme and ensures effective targeting. 

However, applicants who are separated or divorced may be treated as first-time buyers, in accordance with the regulations, if they meet certain conditions, including: 

- they are separated or divorced under a court order or by a separation agreement;

- the property being purchased is the first property since leaving the family home;

- they have left the family home and retain no interest in it; or

- the other party has remained in the family home.

In meeting the conditions as set out above, in particular that the other party has remained in the family home and that the potential applicant has relinquished any rights they had over that property, no financial gain should have been made by the potential applicant in exchange for relinquishing their rights to the property in this manner. Were the individual to have made a financial gain in releasing their rights to the property, such as being bought out by the other party who remains resident in it, they would be deemed to have been compensated for their interest in the property, and therefore not be eligible as a first-time buyer.

The final decision on loan approval is a matter for the relevant 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 Regulations establishing the scheme and the credit policy that underpins the scheme, in order to ensure prudence and consistency in approaches in the best interests of both borrowers and the lending local authorities.   

As part of Housing for All, a ‘Fresh start’ principle will apply to applications to State-run affordable housing and loan schemes in future. This means that people who are divorced/separated and no longer have a financial interest in the family home, or who have undergone bankruptcy or insolvency proceedings, will be eligible to apply for State loan schemes.

Therefore, the successor to the Rebuilding Ireland Home Loan, the 'Local Authority Home Loan', will apply this 'Fresh start' principle. 

Local authority mortgage protection insurance (MPI) scheme has applied to all house purchase loans approved by local authorities after 1 July 1986, including the Rebuilding Ireland Home Loan introduced on 1 February 2018.

One of the conditions of the MPI scheme, which is a group policy, is that it is obligatory for all local authority borrowers who meet the eligibility criteria to join the scheme. Altering this condition would have a negative impact on the scheme and increase the cost for all existing borrowers. A local authority housing loan applicant, who is not eligible for the local authority MPI scheme, must source a suitable comparable individual MPI policy from the market.

I look forward to announcing further details in respect of the Local Authority Home Loan in the coming months. 

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