Dáil Éireann Debate, Tuesday - 25 January 2022
144. Deputy Paul McAuliffe asked the Minister for Housing, Local Government and Heritage the status of his plans to implement the shared equity home loan scheme; and if he will make a statement on the matter. [3354/22]
View answerPart 4 of the Affordable Housing Act 2021 provides the basis for the establishment of the First Home affordable purchase shared equity scheme. The scheme will support first-time buyers on moderate incomes to buy a new-build home, subject to price ceilings reflective of median prices.
Budget 2022 allocated €44 million to my Department for First Home. The banking sector has confirmed it is committed to working with the State to develop and deliver this scheme, and has agreed in principle to match this State funding in order to increase the pool of funding available to potential new homeowners. Subject to the necessary approvals by all parties, it is anticipated that the First Home scheme will operate for the period 2022 to 2026, utilising overall funding of c. €400m and providing support to c. 8,000 households to purchase homes.
The Central Bank of Ireland (CBI) addressed the First Home scheme in its Financial Stability Review II of 2021, published 25 November 2021, and noted that the Scheme would provide an equity rather than a loan product and as such would mitigate the risk of borrower over-indebtedness. In light of these conclusions, the CBI amended the Mortgage Measures Regulations in order to make explicit that regulated mortgage lenders, including the pillar retail banks, may collaborate with the Government in the First Home scheme. This amendment was made, by the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Housing Loan Requirements) (Amendment) Regulations 2021, on the 7 December 2021.
It is intended that the scheme will be operated by a newly-established ‘First Home Scheme Ireland’ Designated Activity Company which was incorporated in December last. Significant work is continuing on the detailed design and parameters of the scheme, and full scheme details will be confirmed upon completion of this work. It is anticipated that initial activity on key areas of work, including public communications, will be conducted in Q1 of this year, in advance of First Home’s first receipt of applications and deployment of equity support, scheduled for Q2.
