Malcolm Noonan (Carlow-Kilkenny, Green Party) | Oireachtas source

The local authority home loan is a Government-backed mortgage for first-time buyers and other eligible applicants delivered through local authorities. The scheme provides mortgage financing for those who are unable to secure a sufficient commercial bank loan. It was introduced on 4 January 2022, replacing the previous Rebuilding Ireland home loan.

It is worth setting out at a high level how the approval process operates. While my Department has no direct role in processing individual applications, it provides guidance and supports to local authorities to assist them in scheme delivery. A credit policy has been issued, as well as supporting guidelines. The receipt and processing of the local authority home loan is a matter for individual local authorities. The length of time required to process a loan varies depending on the specific details of each application and the quality and completeness of the information received. Only when all the required information has been provided can the application be considered as validated and sent to the Housing Agency for review by its specialist team of underwriters who issue recommendations to the local authorities to approve or refuse applications, on average within five calendar days. The local authority credit committee decides whether a loan application should be approved. In most local authorities, the credit committee meets monthly, depending on the number of applications on hand. The credit committee's decision is then communicated to the applicant.

From this point onwards, the house purchase process reverts to the approved applicant. The length of this process is largely dependent on the applicant finding a house and the conveyancing process, and can vary depending on each transaction. Since many elements of the mortgage process are not under the control of the local authorities it would not be realistic to set deadlines for processing times. I note that one element of the process that is internal to the public sector is the underwriting decision on validated applications. That is completed on average in five days, which I consider to be timely.

My Department is in regular contact with local authorities regarding the local authority home loan and stands by to offer any assistance or guidance that is required to support the timely processing of these loans. At this stage I do not see a need for a policy change or audit regarding processing. However, my Department keeps the operation of the local authority home loan under review and will respond if further information comes to light, as the Deputy has brought forward tonight. I do not have county breakdowns but under the previous Rebuilding Ireland home loan 2,700 home loans were drawn down from 2018 to 2021. The data on draw downs is not yet available for the local authority home loan, which commenced on 4 January this year. The underwriters for the home loan have reported that 26 Rebuilding Ireland home loan applications and 213 local authority home loan applications were processed by the Housing Agency in April 2022. Of the 213 applications, ten were invalid, 82 were recommended for approval, which is 43%, and 121 were recommended for decline.

The Deputy also asked a question about the mortgage protection policy, which is left to the homeowner. I will make an inquiry within the Department about that for him.

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