Dáil Éireann Debate, Tuesday - 10 October 2023
304. Deputy Louise O'Reilly asked the Minister for Housing, Local Government and Heritage whether he is aware that people with outstanding loans of relatively small amounts are being offered mortgages with proportionately large reductions because of the outstanding loan under the local authority home loans scheme; and if he will make a statement on the matter. [44041/23]
View answerThe 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.
To be eligible for a Local Authority Home Loan an applicant must meet the income eligibility, be of good credit standing and have sufficient repayment capacity to service the mortgage offered.
If a person applies for a loan, they will be subject to the same credit assessment process that applies to all applicants, which is carried out in accordance with the credit policy for the scheme. The Housing Agency provides a central assessment service to local authorities and credit checks are undertaken as part of that assessment process. This assessment calculates an applicant's mortgage repayment capacity. Income required to service outstanding debts cannot be used to repay a mortgage, so generally persons in this situation end up being offered a reduced mortgage amount.
The final decision on Local Authority Home Loan applications is a matter for the relevant local authority. Decisions on all housing loan applications must be made in accordance with the Regulations establishing the scheme and the 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 authority.
More details can be found on localauthorityhomeloan.ie/
