asked the Minister for the Environment if he will give consideration to changes in the payment of the £3,000 house subsidy under the Housing Finance Agency; if he will consider paying this subsidy direct to the applicant as in the SDA system.
Ceisteanna — Questions. Oral Answers. - Housing Subsidy.
12.
Payments under the mortgage subsidy scheme are structured to provide maximum benefit to recipients. In the case of SDA borrowers whose repayments cover the full loan charges, the subsidy is paid to the borrower to reduce the impact of these changes in the early years of a loan. HFA borrowers, whose payments are income related, do not meet the full loan charges with the result that the amount of the principal outstanding increases in the early years of the loan. The subsidy is, therefore, paid to the Housing Finance Agency on behalf of the borrower to reduce the amount of the loan outstanding and to shorten the repayment period. This arrangement, which is a condition of the loan, is made known to all prospective HFA borrowers and it is not proposed to alter it.
The Minister has given me the information today which he was to give me next week arising from a question yesterday. The amount of the principal outstanding increases in the early years of HFA loans and that is why the mortgage subsidy has very little impact. I would submit that the applicant is not getting the full value of the subsidy unless it is paid directly into his hands, as is the case with the SDA loans.
I said there is no proposal to change the arrangements under HFA loans since it has been considered that the mortgage subsidy is applied to the best advantage of the person applying for such a loan.
I consider the application of the subsidy under the HFA loan unfair vis-à-vis the SDA loan applicant.