The Local Authority Home Loan is a Government-backed mortgage for those 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.
Given the nature of a mortgage application, it is not possible to indicate at an early stage whether a given applicant will be successful in gaining an Approval in Principle for a Local Authority Home Loan and whether they would be successful in finding a home that can be purchased using the Local Authority Home Loan. Applicants must meet scheme eligibility criteria, after which a thorough credit assessment takes place, and applicants' compliance with these requirements cannot be ascertained at the outset of their application.
The final decision on loan approval is a matter for the relevant local authority and its credit committee on a case-by-case basis. Decisions on all housing loan applications must be made in accordance with the statutory credit policy, that underpins the scheme, in order to ensure prudence and consistency in approaches in the best interests of both borrowers and the lending local authorities.
