Dáil Éireann Debate, Wednesday - 19 January 2022
494. Deputy Cian O'Callaghan asked the Minister for Housing, Local Government and Heritage the amount spent by each approved housing body on the mortgage-to-rent scheme since its introduction in 2015; the number of properties those payments relate to by approved housing body in tabular form; and if he will make a statement on the matter. [63544/21]
View answerThe Mortgage to Rent (MTR) scheme introduced in 2012 is targeted at supporting households in mortgage arrears who have had their mortgage position deemed unsustainable by their lender under the Mortgage Arrears Resolution Process (MARP); agree to the voluntary surrender of their home and are deemed eligible for social housing support. The property in question must also meet certain eligibility criteria. The concept of the scheme is that a household with an unsustainable mortgage goes from being a homeowner to being a social housing tenant. The borrower surrenders their property to their lender who sells it to a MTR provider which can be either an Approved Housing Body (AHB) or since 2018 a private company, Home for Life. The AHB or local authority (in the case where the property is sold to a private company) becomes the landlord and the borrower remains in the property as a tenant paying a differential rent to the landlord based on his or her income.
To the end of September 2021, 1497 households with unsustainable private mortgages have completed the MTR scheme since its introduction nationally in 2013. 951 households had their case completed by an AHB. The Housing Agency publishes, on a quarterly basis, detailed statistical information on the operation of the MTR scheme including a purchaser status report which shows a breakdown of the number of active, completed, ineligible and terminated cases per purchaser, including AHBs. This information is available on the Housing Agency's website at the following link: www.housingagency.ie/housing-information/mortgage-rent-statistics
The Capital Advance Leasing Facility (CALF) funding is capital support provided to AHBs by local authorities to facilitate the funding of construction, acquisition or refurbishment of new social housing units, including units acquired through the Mortgage to Rent scheme. My Department can provide CALF funding of up to 40% in the case of the Mortgage to Rent scheme for eligible projects, with the housing units provided to local authorities for social housing use under long-term lease arrangements known as Payment and Availability Agreements. A nominal interest rate of 2% fixed per annum is charged by the local authority on the initial capital amount. Repayments on either the capital or interest are not required during the term of the loan (between 10 and 30 years), although where an AHB chooses to, repayments can be made during the term. At the end of the term, the outstanding capital amount plus the interest accrued, is owed and repayable to the local authority. The local authority issues the CALF monies to the AHB and the local authority, in turn, recoups same from the Department. The remainder of the capital cost is sourced by the AHB through other borrowings to which the local authorities are not party. All proposals for CALF are submitted to my Department by AHBs for review, to ensure that each project complies with the terms of the CALF and that there are sufficient funds available.
My Department does not hold information on the loan agreements under CALF, as the loan agreement, is between the local authority and the relevant AHB. Accordingly, information on the number and value of CALF loans, including the balance owing, is held by the relevant local authorities. The value and term of each loan varies by project.
My Department also supports AHBs on MTR projects by providing CALF funding for eligible start-up costs of up to 1.5% of the total capital cost or since March 2018, up to €3,300 (ex. VAT), whichever is lesser. Up to the 30th November 2021, these costs were paid directly from my Department to the AHB. For cases approved from the 1st December 2021, AHBs will submit these claims to the local authority, who will then seek recoupment from my Department for the vouched expenditure.
The table below shows CALF capital expenditure by my Department for the AHB Mortgage to Rent scheme. It is important to note that owing to the nature of the CALF, expenditure relating to properties may span a number of payment periods.
AHB – MTR - CALF Funding
|
Year |
Expenditure |
|
2015 |
€0.780m |
|
2016 |
€1.795m |
|
2017 |
€3.019m |
|
2018 |
€4.379m |
|
2019 |
€8.902m |
|
2020 |
€6.697m |
The Programme for Government and Housing for All includes a commitment to strengthen the Mortgage to Rent Scheme and ensure that it is helping those who need it. Building on the significant improvements already made to the scheme since the last review in 2017, my Department is currently working closely with the Housing Agency and key stakeholders to identify any further improvements required to the scheme. A review of the MTR scheme is due to be published shortly.
