Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Question 140: To ask the Minister for the Environment, Heritage and Local Government the changes he has made to the processing of housing loans available through local authorities; if decisions in respect of such loans no longer rests with local authorities; if local authorities have discretion in respect of the loans currently available; if there are staffing implications arising from the changes he has introduced; the consultations which took place in respect of these changes; and if he will make a statement on the matter. [26851/09]

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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Housing loans continue to be provided by local authorities for households who wish to build or purchase their own home, including affordable housing purchasers and local authority tenants who wish to purchase under the tenant purchase scheme, but cannot access finance from private institutions. To ensure effective targeting of resources to support households most in need, income limits are applied, distinguishing between single and dual income households. A maximum loan limit is also applied and local authorities, in assessing loan applications, take account of the household's ability to finance the loan based on their net household income.

I recently introduced new regulations to underpin local authority lending into the future. The Housing (Local Authority Loans) Regulations 2009 replace the previous regulations, providing for a new loan limit of €220,000 and maximum earnings of €75,000 in the case of joint applicants and €50,000 for single applicants. The previous maximum loan to value ratio of 97% still applies.

The regulations also provide for the introduction of a formal credit policy to ensure prudence and consistency of approach for all local authority mortgage lending. To reduce the administrative burden on local authorities in the loan application process, particularly in carrying out credit checks through the Irish Credit Bureau, a centralised underwriting service is being provided by the Affordable Homes Partnership. The central underwriting unit, staffed by a small number of individuals with relevant expertise to minimise risk for the State, will issue a recommendation on each application to the relevant local authority. It is important to note, however, that the final decision on all loan applications continues to rest with the local authority concerned.

No specific staffing implications arise from the new arrangements, which were introduced following discussion with the County and City Managers' Association and the Affordable Homes Partnership.