Deirdre Clune (Cork South Central, Fine Gael)
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Question 581: To ask the Minister for the Environment, Heritage and Local Government the position regarding the status of the home choice loan scheme; the budget for this scheme for 2009; the budget provided for loans under this scheme in 2009; the number of staff employed to operate this scheme in 2009; the number of persons who applied for loans under this scheme in 2009; the number of loans approved in 2009; the value of the loans approved in 2009; if the scheme will be reformed in 2010; and if he will make a statement on the matter. [6404/10]

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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More than 1,400 prospective purchasers formally registered interest on the dedicated home choice loan website with 44 applications being made over the course of 2009. Of these, four loan applications were approved with a combined value in excess of €800,000. In terms of available budget for the scheme, it is important to note the scheme is demand led. As such, no budget has been set and no moneys that could be deployed elsewhere have been ring fenced for the scheme. The extent of the loan book arising will depend solely on the level of uptake over the duration of the scheme.

Loan finance is drawn down, as appropriate, by local authorities from the Housing Finance Agency and on-lent to successful applicants. Costs of approximately €280,000 were incurred in 2009 in establishing the scheme, including the setting up of the central processing unit within the Affordable Homes Partnership. These costs were met fully from within existing resources within the partnership. A total of four people across the entire system, which covers all local authority areas, have been employed to roll-out the scheme. A significant element of the staffing costs was incurred in the development of the loan processing model which applies to the Home Choice Loan but which has also now been used in the development of revised systems for processing and credit checking of normal local authority house purchase loan applications under other schemes such as affordable housing, shared ownership etc.

The scheme has already been revised this year with the inclusion, as of 1 January 2010, of second hand houses to reflect the recent shift in first time buyer preferences, possibly as a result of improved affordability given price decreases and historically low interest rates. I also reduced income limits from €40,000 to €35,000 for single applicants and from €50,000 to €45,000 for joint applicants. I do not expect additional administrative costs to arise from the extension of the scheme. I will continue to review and monitor all aspects of the scheme. Once I am satisfied that the current constrained mortgage market has improved the scheme will be discontinued.