The Government is committed to supporting access to home ownership for lower income households and a range of paths to such ownership will remain in place in that regard. These include the incremental purchase scheme, the availability of loan finance from local authorities for house purchase, including open market purchase, and the tenant purchase scheme. Two types of house purchase loan are available from local authorities: standard annuity loans targeted at lower income first time buyers and those under the Home Choice Loan scheme which are available to qualifying middle income first time buyers affected by the “credit crunch”. The terms and conditions governing the operation, including eligibility terms, of annuity mortgages and the Home Choice Loan are set out under the Housing (Local Authority Loans) Regulations 2009-2012 and the Housing (Home Choice Loan) Regulations 2009 respectively. These are available on my Department’s website: www.environ.ie.
While there is no reference in the Regulations to a lower income limit threshold for mortgage applicants, the associated credit policy provides a procedure for calculating the maximum amount of mortgage repayments permissible as a percentage of the household income. Local authorities are advised to examine each application on its own merits in determining whether an applicant is eligible for a house purchase loan. It is the case that the rate of refusal of applications has increased since the credit policy was introduced. However, it is also clear that the loans issued under that credit policy are more likely to be fully performing. I consider the current arrangements are fair and adequately meet the needs of prospective home owners in a prudent manner.
