Seán Sherlock
Ceist:598. Deputy Sean Sherlock asked the Minister for Housing, Local Government and Heritage if he will provide an update on a reformed local authority home loan under Housing for All. [43310/22]
Amharc ar fhreagraThursday, 8 September 2022
Ceisteanna (598, 616)
Seán Sherlock
Ceist:616. Deputy Sean Sherlock asked the Minister for Housing, Local Government and Heritage if he will provide an update on a fresh start principle for applications to State affordable housing and loan schemes under Housing for All. [43329/22]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 598 and 616 together.
The Local Authority Home Loan is a Government backed mortgage scheme for those on modest or low incomes who cannot get sufficient funding from commercial banks to purchase or build a home. It has been available nationwide from local authorities since 4 January 2022 for first-time buyers and fresh start applicants. As of 4 January 2022, no new Rebuilding Ireland Home Loan applications are being accepted, although applications already in process are being honoured.
The loan can be used both for new and second-hand properties, or to self-build. It also includes the purchase of homes through State schemes such as the Tenant Purchase Scheme and Affordable Housing Schemes, with the exception of the First Home Scheme.
The loan is a normal Capital and Interest-bearing mortgage which is repaid by direct debit on a monthly basis. You can borrow up to 90% of the market value of the property.
Maximum market values of the property that can be purchased or self-built are:
- €320,000 in the counties of Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow, and
- €250,000 in the rest of the country.
A ‘Fresh Start’ principle applies for applications to the Local Authority Home Loan. The following categories of persons are eligible to apply for the Local Authority Home Loan under the Fresh Start principle:
- Applicant(s) that previously purchased or built a residential property, but is divorced/separated or otherwise and has left the property and divested themselves of their interest in the property are eligible.
- Applicant(s) that previously purchased a residential property, but have been divested of this through insolvency or bankruptcy proceedings, are eligible to apply. The applicant must be discharged from bankruptcy proceedings. It should be noted that a return to solvency should not be interpreted as a return to creditworthiness, which is a separate assessment.
In recognition of such instances, an exemption to the First Time Buyer eligibility criteria can be applied under the Fresh Start Principle.
The final decision regarding the Local Authority Home Loan application is made by the relevant Local Authority Credit Committee on a case by case basis.
Further details can be found on localauthorityhomeloan.ie/
My Department regularly publishes information on the number and value of (i) local authority loan approvals and (ii) local authority loan drawdowns. Local authority approval means that an official letter of offer has been sent to a borrower (and therefore relates to a specific property and loan amount).
Information on drawdowns, approvals, average drawdowns, and average approvals for both the Local Authority Home Loan and Rebuilding Ireland Home Loan up to Q1 2022 is available at the following link, which will be updated as soon as figures are available:
www.gov.ie/en/collection/42d2f-local-authority-loan-activity/#local-authority-loans-approvedpaid
The Fresh Start Principle also applies to other Affordable Housing Schemes including the Local Authority Affordable Purchase Scheme and the First Home Scheme (Shared Equity).
The Local Authority Affordable Purchase Scheme sees local authorities make new homes available for purchase by eligible applicants at reduced prices. In return, the local authority takes a percentage equity stake in the Affordable Purchase home equal to the discount of the purchase price from the full market value of the home. If an eligible applicant purchases a home at a 20% discount, for example, the local authority takes a 20% equity interest in the home.
An additional exception for the Local Authority Affordable Purchase Scheme is those who previously purchased or built a home which is now no longer of an appropriate size for their household.
More information on the scheme can be found here: www.gov.ie/en/service/4ea9a-local-authority-affordable-purchase-scheme/
The First Home Scheme is available nationally on a demand-led basis, and will help applicants to afford new homes in the private market through the use of an equity share model. The Scheme will support purchases of homes within regional price ceilings, set with reference to the median prices for new homes purchased by first-time buyers in the area.
Full information is available on the dedicated website: www.firsthomescheme.ie