Dáil Éireann Debate, Tuesday - 18 April 2023
859. Deputy Paul Kehoe asked the Minister for Housing, Local Government and Heritage whether a person may appeal or seek an exception to the policy of a clear financial record for a minimum duration of two years under the Fresh Start principle with regard to a local authority home loan application where the person has exited bankruptcy in June 2021; and if he will make a statement on the matter. [18247/23]
View answerThe Local Authority Home Loan is a Government backed mortgage scheme for those who cannot get sufficient funding from commercial banks to purchase or build a home. The loan can be used both for new and second-hand properties, or to self-build. A ‘Fresh Start’ principle applies for applications to the Local Authority Home Loan.
Applicant(s) that previously purchased a residential property, but have been divested of this through insolvency or bankruptcy proceedings, are eligible to apply for the Local Authority Home Loan under the "Fresh Start" principle. The applicant must have exited insolvency/bankruptcy proceedings to be eligible to apply.
A requirement for applicants under the "Fresh Start" principle post-bankruptcy is that they need to have had 2 years of no negative credit events before their application for the Local Authority Home Loan to establish their creditworthiness. Any payment issue in this period would be considered as demonstrating a lack of creditworthiness. While an applicant does need to have exited bankruptcy to be eligible to apply, this 2 year period may include the final period of their bankruptcy. It should be noted that a return to solvency should not be interpreted as a return to creditworthiness, which is a separate assessment.
