Dáil Éireann Debate, Wednesday - 7 February 2018
305. Deputy Niamh Smyth asked the Minister for Housing, Planning and Local Government if the concerns that the new Rebuilding Ireland home loan scheme will not help those persons who cannot afford to save for a deposit or obtain a mortgage will be addressed in counties Cavan, Monaghan and Meath; and if he will make a statement on the matter. [6189/18]
Amharc ar fhreagraFollowing a review of the two existing local authority home loan schemes, the House Purchase Loan and the Home Choice Loan, a new loan offering, the Rebuilding Ireland Home Loan, was made available from 1 February 2018. The new loan will enable credit worthy first time buyers to access sustainable mortgage lending to purchase new or second-hand properties. 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 otherwise have been able to afford at a higher interest rate.
To support prudential lending and consistency of treatment for borrowers, a Loan to Value ratio of 90% as per the Central Bank's prudential lending guidelines applies to the Rebuilding Ireland Home Loan.
Therefore, to avail of the loan, applicants must have a deposit equivalent to 10% of the market value of the property. The applicant(s) must provide bank or similar statements (post office, credit union, etc.) for a 12-month period immediately prior to making an application clearly showing a credible and consistent track record of savings. The cash savings should be no less than 3% of the market value of the property. Gifts are permissible up to 7% of the market value of the property where their source is verified.
The availability of the Help To Buy Scheme for first-time-buyers offers additional assistance to purchasers of newly built properties. Up to 5% of the purchase price of properties below €400,000 could be available, which represents a significant contribution towards these deposit requirements. This should alleviate some of the challenges faced by first-time buyers in accessing the 10% deposit of the market value of the property. The initiative has been designed to provide immediate and targeted support for first-time buyers in meeting their deposit requirements and encouraging the construction of new housing units.
