Dáil Éireann Debate, Thursday - 21 February 2019
213. Deputy Anne Rabbitte asked the Minister for Housing, Planning and Local Government if a person who wishes to avail of a loan under the Rebuilding Ireland home loan scheme and wishes to self-build can use the site as a deposit or part of in view of the fact that all other financial institutions on self-builds allows same; and if he will make a statement on the matter. [8928/19]
Amharc ar fhreagraTo 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 of funds equivalent to 10% of the market value of the property.
In the case of a self-build property, a loan can be made up to 90% of either the construction cost, or in the case where the site is also being purchased, the construction cost plus the cost of purchasing a site. However, in both these instances, 90% of the loan being sought is the maximum amount that will be approved. The value of the site cannot therefore be used as a deposit.
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 of cash are permissible up to 7% of the market value of the property, where their source is verified.
Decisions by local authorities as to whether to advance a loan to an individual are taken on a case-by-case basis, within the criteria as set out in the credit policy. Each local authority must have in place a credit committee which makes the final decision on applications for loans.
