Tuesday, 15 May 2018

Ceisteanna (583, 588)

Michael Lowry

Ceist:

583. Deputy Michael Lowry asked the Minister for Housing, Planning and Local Government the reason the official information booklet and website published for the Rebuilding Ireland home loan scheme does not clearly state information (details supplied) in relation to the deposit criteria of the home loan application process; if the official information and website will be updated to include same; and if he will make a statement on the matter. [21130/18]

Amharc ar fhreagra

Bríd Smith

Ceist:

588. Deputy Bríd Smith asked the Minister for Housing, Planning and Local Government if the Rebuilding Ireland home loan scheme is excluding persons that may have an insufficient history of saving having secured a deposit sum from relatives and so on; if such exclusions run contrary to the purpose of the scheme and past statements in relation to helping young first-time buyers struggling to secure loans from traditional sources while being in rented accommodation that is costing a significant portion of their earnings; and if he will make a statement on the matter. [21246/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Housing)

I propose to take Questions Nos. 583 and 588 together.

The new Rebuilding Ireland Home Loan Scheme is designed to 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% 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.

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.

Exceptions to the above can be made where an applicant/applicants can clearly demonstrate a consistent and credible record of savings or rent payment through their bank account which at a minimum is equal to:

- In the case of a fixed rate loan, the proposed monthly loan repayment, or

- In the case of a variable rate loan, the proposed stress-tested monthly loan repayment.

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.

Regarding the information available to prospective applicants on the Rebuilding Ireland Home Loan website, I am aware of issues concerning the inclusion of the specific deposit requirements on the website. I have recently met with the Chief Executives of the two main agencies involved in the implementation of the scheme, the Housing Agency and the Housing Finance Agency, and I have requested that they address a number of issues to improve the operation of the scheme, including the provision of additional information on-line in relation to the deposit requirements of the scheme. This will give potential applicants a clearer indication of the deposit amount that they are required to have under the terms of the scheme.