Dáil Éireann Debate, Tuesday - 22 February 2022
350. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage the new rules pertaining to the local authority home loan scheme for those seeking to access the loan that previously owned and lost a family home due to insolvency or bankruptcy; the length of time after insolvency and bankruptcy before they can apply; and if he will provide any other criteria which may apply in such cases. [9251/22]
View answerThe Local Authority Home Loan is a Government backed mortgage scheme for those on modest or low incomes who cannot get sufficient funding from commercial banks to purchase or build a home. It has been available nationwide from local authorities since 4 January 2022 for first-time buyers and fresh start applicants. The loan can be used both for new and second-hand properties, or to self-build.
A ‘Fresh Start’ principle applies for applications to State loan schemes such the Local Authority Home Loan. The following categories of persons are eligible to apply for the Local Authority Home Loan under the Fresh Start principle:
- Applicant(s) that previously purchased or built a residential property, but is divorced and has left the property and divested themselves of their interest in the property are eligible.
- Applicant(s) that previously purchased a residential property, but have been divested of this through insolvency or bankruptcy proceedings, are eligible to apply. The applicant must be discharged from bankruptcy proceedings. It should be noted that a return to solvency should not be interpreted as a return to creditworthiness, which is a separate assessment.
In recognition of such instances, an exemption to the First Time Buyer eligibility criteria can be applied under the Fresh Start Principle. Therefore, once a person has exited insolvency/bankruptcy proceedings and if as a result of insolvency or bankruptcy they had to sell or had been divested of their home, they are eligible to apply for a Local Authority Home Loan. However, credit worthiness and repayment capacity must also be assessed as part of the underwriting process.
The final decision regarding the Local Authority Home Loan application is made by the relevant Local Authority Credit Committee on a case by case basis.
Further details can be found on localauthorityhomeloan.ie/.
