Dáil Éireann Debate, Tuesday - 5 April 2022
317. Deputy Sean Sherlock asked the Minister for Housing, Local Government and Heritage if he will report on the Housing for All objective for a fresh start principle for applications to State affordable housing and loan schemes. [17546/22]
View answerWhile most affordable housing measures are primarily targeted at first-time buyers, the Housing for All strategy explicitly provides for the Fresh Start principle. The Fresh Start principle extends the supports available under both Affordable Purchase schemes and the Local Authority Home Loan scheme to applicants who are divorced, legally separated, or where the relationship has ended and where they retain no beneficial interest in a home. The Fresh Start principle will also apply to those who have previously purchased a residential property but have been divested of this through personal insolvency or bankruptcy arrangements, proceedings or other legal processes.
Specifically in relation to the Local Authority Affordable Purchase scheme, the Fresh Start principle has already been accommodated under Part 2, Section 10 of the Affordable Housing Act 2021. This scheme assists first-time buyers (as well as those eligible under the Fresh Start principle) purchasing Local Authority-delivered new homes by bridging the gap between the market value of the home and the combined value of the buyer's mortgage and deposit. Regulations setting out the detailed eligibility criteria for the scheme are at an advanced stage and will be issued in the coming weeks.
Part 4 of the Affordable Housing Act 2021 provides for the establishment of the First Home scheme, which will act in a similar way to the Local Authority-led scheme, though it will apply to homes purchased through the private market. Under both schemes, an equity stake corresponding to the level of support provided is taken in the market value of the home. The supported home-owner will have an option to achieve full ownership by buying-out the equity stake in the purchased property at a timing of their own discretion. An equity buy-out will be required in circumstances where the home is sold or passed on, or ceases to the primary residential residence.
The First Home scheme will be available at a national level and will incorporate regional price caps reflecting median house price sales. Confirmation of the final details of this scheme is ongoing in conjunction with the relevant stakeholders and it is anticipated that the First Home scheme will be available for applications, including those eligible under the Fresh Start principle, in the second half of this year. This initiative is being designed to ensure support is provided to those that, because of the current income levels, cannot secure a sufficient mortgage to meet the cost of a modest newly constructed home in their preferred location.
The 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.
The ‘Fresh Start’ principle applies for applications to State loan schemes such as 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.
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/
