I propose to take Questions Nos. 61, 62, 85, 92, 96, 117 and 118 together.
Last week, I announced a package of initiatives to help alleviate affordability pressures faced by households, particularly in areas of high housing demand and high accommodation costs. A central element of the measures involved is the introduction of a new Rebuilding Ireland home loan. Following a review of the two existing local authority home loan schemes, this new loan offering will replace the previous loans and will be available with effect from tomorrow, 1 February 2018. The new loan will enable creditworthy first-time buyers to access sustainable mortgage lending to purchase new or second-hand properties within a suitable price range. The low rate of fixed interest associated with the Rebuilding Ireland home loan provides first-time buyers with access to mortgage finance that they may not have otherwise been able to afford at a higher interest rate. To extend the Rebuilding Ireland home loan to those who are not first-time buyers would mean that first-time buyers would have to compete for the limited funding available with those who have previously owned a home and who may have already benefited from some form of State support in purchasing their first home.
The Housing Finance Agency, HFA, has raised €200 million from a variety of sources on a fixed rate basis for periods out to 30 years maturity. Based on the pricing achieved, local authorities can offer a first tranche of fixed rate annuity finance to eligible borrowers at rates of 2.0% and 2.25% per annum, for 25 and 30 years, respectively, up to an aggregate maximum of €200 million. What this means essentially is that a person or couple can purchase a home while ensuring that they can still keep their monthly repayments to one third of their net disposable income with no risk of their mortgage rate rising and therefore no threat to their ability to afford their repayments, giving them certainty and security. By placing ceilings on the value of properties that may be purchased and by aligning the terms of the loan with the loan-to-value elements of the Central Bank prudential lending rules, any possible inflationary impact on the market is limited.
The funding is not allocated to individual local authorities but rather will be drawn down by local authorities from the HFA to match-fund their lending to approved loan applicants. Further tranches of loan finance can be secured by the HFA as necessary. As is currently the case, my Department will continue to publish information on the overall number and value of local authority loans on its website.
The website www.rebuildingirelandhomeloan.ie has been live since 21 January and contains full information on the loan, including eligibility criteria, interest rates, a borrower information booklet, a calculator and details on how to apply for the loan, including the application form. A call centre has also been put in place to deal with queries.
In addition to the new home loan, I announced the introduction of a new affordable purchase scheme which will be governed by the relevant provisions of the Housing (Miscellaneous Provisions) Act 2009. I will be commencing these provisions and making associated regulations outlining the criteria for the scheme in the coming weeks. Under the scheme, affordable homes will be delivered by local authorities, primarily using sites from their landbank to leverage the construction of homes for sale at affordable price points. This means that local authorities will now have more options for the development of their sites for mixed tenure social and affordable housing. The first such homes are being procured by Dublin City Council at O'Devaney Gardens and I have asked all local authority chief executives to submit, by mid-February, an outline of their respective affordable housing programmes from their lands, with a particular emphasis on Dublin, Cork and Galway, where the affordability challenge is greatest.