Written answers
Thursday, 18 November 2010
Department of Environment, Heritage and Local Government
Local Authority Housing
5:00 pm
Noel Ahern (Dublin North West, Fianna Fail)
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Question 147: To ask the Minister for the Environment, Heritage and Local Government the position regarding arrangements with financial institutions in his Department's various housing schemes; the financial institutions that currently provide mortgages for affordable homes and the arrangement with first and second claim; the arrangement with the low-cost sites scheme; if it differs from the affordable homes scheme; if it is correct that the local authorities insist on first claim here, and that as such financial institutions will not approve mortgages; and the other options available to co-op members (details supplied) who cannot get a mortgage [43446/10]
Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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Mortgage finance for affordable housing has traditionally been available from the local authorities backed by Housing Finance Agency lending. This continues to be the case. However, in recent times, Bank of Ireland Mortgage Bank, the EBS, Irish Intercontinental Bank, First Active, Haven Mortgages and more recently Ulster Bank are now providing mortgage finance for affordable housing applicants.
The Housing (Miscellaneous Provisions) Act 2004 provided for agreement between a housing authority and a lending institution in relation to the postponement of the authority's clawback charge in favour of the lending institution's charge on the property to secure a loan advanced by it to the applicant for the purchase of the property from the authority.
My Department is aware that some applicants who have bought sites under the low cost sites scheme have experienced difficulties in obtaining mortgages from certain financial institutions. This arises where a financial institution objects to a local authority having the first charge on the property for clawback purposes. My Department has advised authorities where this problem has arisen that it is not a requirement of the scheme that the authority has a first charge, and that it should enter into discussions with the financial institutions involved at local level with a view to seeking a resolution to the issue.
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