Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 15: To ask the Minister for the Environment, Heritage and Local Government his views on whether the home choice loan scheme operated by his Department could lead to negative equity problems for first-time buyers; and if he will make a statement on the matter. [43157/08]

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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As indicated during the debate on Budget 2009, it is important that the ongoing process of correction in the housing market is not artificially interfered with. Given that sentiment in the housing market is heavily dependent on wider sentiment in the economy, the Government's approach is focused on the broader economic fundamentals and ensuring, ultimately, that the housing market is underpinned by these. Any housing specific interventions must be targeted in nature and designed to achieve specific outcomes. The announcement in the Budget of the introduction, for a limited period, of the new Home Choice loan product for certain first-time buyers is fully in line with this policy.

The scheme is designed to respond to a very specific set of circumstances in the housing market whereby prospective middle income first-time buyers who would previously have been in a position to access mortgage finance from one of the financial institutions are not currently in a position to do so, due to the impacts of the credit crunch. The scheme will be governed by a detailed, robust and prudent credit policy which is now being finalised. In addition, it should be recognised that the initiative provides no financial incentive to enter the housing market for those who believe that the process of correction has yet to conclude; it will merely facilitate certain first-time buyers who have themselves decided to purchase a home at this time.