Jan O'Sullivan (Limerick City, Labour) | Oireachtas source

On foot of the recommendations of the Keane report on mortgage arrears, the Government launched a mortgage to rent scheme on a pilot basis in February 2012. The scheme, which was extended nationally in June 2012, targets low-income families with unsustainable mortgage situations and little or no prospect of a significant change in circumstances in the foreseeable future. The scheme ensures the family remains in its home. Ownership is transferred to an approved housing body which rents it to the original owner. The eligibility requirements are in line with other forms of social housing support.

Householders seeking to avail of the mortgage to rent scheme must have been involved in the mortgage arrears resolution process with their lenders and have agreed they can no longer afford to pay their mortgage loans now or in the future; must own the property they live in, with a current market value of less than €220,000 in the Dublin area or less than €180,000 in the rest of the country; must have their property in good condition, in a suitable location and appropriate to their current needs; must not own any other property or have assets in excess of €20,000; must have household income not exceeding €25,000, €30,000 or €35,000 a year, depending on the part of the country they live in - household income in this context is net of taxes and social insurance; and must have a long-term right to remain in Ireland. The treatment of any mortgage shortfall or residual debt will be a matter for bilateral resolution between the borrower and lender.

To date, 828 cases have been submitted by lenders. Of these, 459 cases are being processed and 220 borrowers have been engaged with or are in the process of being engaged with by the lenders. Sales have been agreed on 20 properties and eight of these sales have been completed. The number of completed transactions is low but significant progress has been made. All of the main lenders and so-called sub-prime lenders are fully engaged and have instituted the necessary internal processes. It is important to bear in mind that the transition from being a home owner to a social housing tenant is a major one for families.

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Mortgage to rent or other such interventions cannot be rushed for any party. For example, the process provides a 60-day decision period and a 28-day cooling off period within the timeframe of the scheme. My Department estimates that the overall timeframe per case from start to completed transaction will be up to eight months. This compares favourably to the timeframes in other jurisdictions operating similar schemes. Households benefiting from mortgage to rent have the option to repurchase the home within a five-year period if their circumstances allow. A mortgage to rent option for local authority borrowers in arrears has been piloted in two local authority areas, Westmeath County Council and Dublin City Council, and will be extended nationally in the coming months.

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