Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

I thank the Acting Chairman for his kind comments. As a former Member of this House, I very much look forward to working with the House in my capacity as Minister of State in the Department of Housing, Local Government and Heritage.

I thank the Senator for raising this important issue and some additional issues and allowing me the opportunity to provide an update on this matter. I am well aware of the work the Senator does in Waterford and, more particularly, as my party's spokesperson on housing in the Seanad.

The local authority home loan is a Government-backed mortgage for first-time buyers or other eligible applicants through local authorities. The scheme is available for the purchase of new or second-hand residential properties and for self-builds. The loan is aimed at buyers who are unable to secure the mortgage they need from a financial lending institution. The local authority home loan has been available nationwide from all local authorities since 4 January 2022.

The income ceiling for a single applicant is €65,000, which is up from €50,000 under the previous scheme, the Rebuilding Ireland home Loan, for residential properties in counties Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow where the maximum market values of the properties is €320,000. There is a €50,000 income ceiling for single applicants seeking to purchase homes in all other counties where the maximum market value of the property is €250,000. The ceiling for joint applicants is €75,000 nationwide.

It is important to note that the house price limits for homes sold under local authority affordable housing schemes are calculated differently from the house price limits for homes bought on the open market. One is a market value, while the other is a discounted purchase price value. If a home is being sold under a local authority affordable purchase scheme, the relevant price for the determination of the home's eligibility for the local authority home loan and for the maximum borrowing amount is the purchase price determined by the relevant local authority for that affordable purchase home. Regardless of the market value, if the purchase price is below the relevant maximum price under the local authority home loan for that local authority, it is eligible to be purchased using the local authority home loan. The basis for that is Statutory Instrument No. 701 of 2021, Housing Loan Regulations 2021. That was circulated to every local authority and specified that it is the purchase price that should be taken into account for complying with the house price limit if the home is purchased under the local authority affordable purchase scheme. That is the discounted price.

To ensure there is absolute clarity, particularly for the Senator in the context of Waterford, my Department is preparing a guidance note on the interaction of the local authority home loan with the local authority affordable purchase scheme. This will provide a detailed example of how the two schemes should interact. As it stands, SI 701 of 2021, Housing Loan Regulations 2021, provides that it is the discounted purchase price and not the market price that can be used to comply. If the discounted price is below €250,000, a person can avail of the home loan scheme as well. In the example cited by the Senator, the purchase price is €230,000, which is within the local authority home loan scheme limits for Waterford.

All local authorities with local authority affordable purchase schemes will have homes within current house price limits and, as such, both schemes work well together. While it may be the case that not every local authority affordable purchase home will be eligible, such as larger and, in particular, higher priced houses, this is understandable as the local authority home loan is aimed at a lower income cohort.

We will continue to monitor these scheme parameters as the housing market has changed since the house price limits were first set. It goes back to the Senator's point about the price and the income threshold. I will take the matter up with my Department in terms of the review. It is important that the local authority home loan remains relevant for aspiring homeowners. It is reasonable, as the Senator suggests, that local authority affordable purchase houses should generally be eligible for purchase using the local authority home loan. We are keeping the appropriate house price limits under review and will ensure that any changes to house price limits maintain coherence between these schemes.