Home Loan Scheme

Dáil Éireann Debate, Tuesday - 5 November 2019

Tuesday, 5 November 2019

Ceisteanna (1137)

Tony McLoughlin

Ceist:

1137. Deputy Tony McLoughlin asked the Minister for Housing, Planning and Local Government if consideration will be given to examining an issue regarding the way in which the maximum amount allowed to be borrowed under the Rebuilding Ireland home loan scheme is set at €250,000 in view of the fact that this funding cannot be allocated to an applicant if the house the applicant plans to build will be worth more than €250,000 upon completion; if his attention has been drawn to the fact that this approach does not take into consideration varying land values, locations and other localised factors (details supplied); his views on whether the scheme focuses on a minority as opposed to the majority of the population that is seeking assistance with building a new home under the scheme; his further views on whether the scheme is not fit for purpose in this regard; and if he will make a statement on the matter. [44682/19]

Freagraí scríofa

Minister for Housing, Planning and Local Government

The Rebuilding Ireland Home Loan is a Government-backed mortgage for first-time buyers and has been made available nationwide from local authorities from 1 February 2018. The loan can be used both for new and second-hand properties, or to build your own home.

With a Rebuilding Ireland Home Loan you can borrow up to 90% of the market value of a residential property. Maximum market values of the property that can be purchased or self-built are:

- €320,000 in the counties Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow, and

- €250,000 in the rest of the country.

This limits the amount that can be borrowed to no more than €288,000 in the counties Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow and no more than €225,000 in the rest of the country. These maximum limits apply equally to self-builds.

Within the maximum loan limits, there are some rules that set out the limit of funding for self builds. Funding should not exceed 90% of total build costs (which can include site cost where the site is purchased).

For self-builds, applicant(s) are required to submit with their loan application a valuation report that details the site value, cost of works and post construction market value of the completed property. The valuation report is required to be completed by an Independent Valuer and will be considered by the local authority in assessing the associated loan application.

It is important that all applicants are treated equally. In this regard, it is reasonable that the rules for setting the maximum market value of completed homes eligible for this scheme are the same for individuals either buying or building their own homes. I have no plans to change this requirement.

It should also be noted that individuals self-building may be able to avail of the Help-to-Buy scheme, which is available for purchasers of new residential construction, such as self-builds.