Dáil Éireann Debate, Tuesday - 17 April 2018
1554. Deputy Clare Daly asked the Minister for Housing, Planning and Local Government the options available to persons who had hoped to obtain a house purchase loan from a local authority and had saved the 3% deposit required, since the abolition of the house purchase loan and its replacement with the Rebuilding Ireland home loan, which has a 10% deposit requirement (details supplied). [15641/18]
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.
As with the previous local authority loan offerings, the Rebuilding Ireland Home Loan is available to first-time buyers only. This is to ensure the effective targeting of limited resources and there is no change in this regard.
To support prudential lending and consistency of treatment for borrowers, a Loan to Value ratio of 90% applies to the Rebuilding Ireland Home Loan as per the Central Bank's prudential lending guidelines. Therefore, in order to avail of the loan, applicants must have a deposit equivalent to 10% of the market value of the property. I have no plans to change this as this provision is financially prudent and helps to protect both borrowers and lenders alike.
Applicants must provide bank or similar statements (such as 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.
For prospective purchasers of newly built properties, the availability, through the Revenue Commissioners, of the Help to Buy Initiative for first-time buyers may provide additional assistance to prospective applicants for the Rebuilding Ireland Home Loan. Up to 5% of the purchase price of properties below €400,000 could be available, which represents a significant contribution towards the relevant deposit requirements.
