Denis Naughten (Roscommon-South Leitrim, Independent)
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To ask the Minister for Environment, Community and Local Government if he will review the criteria covering the issuing of local authority mortgages and shared ownership schemes; and if he will make a statement on the matter. [38778/12]

Jan O'Sullivan (Limerick City, Labour)
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In advancing loans for house purchase by lower income borrowers it is of critical importance that local authorities make such funding available on the basis of sound lending criteria. My Department and individual local authorities have a responsibility to ensure that mortgage lending is prudentially based and that the capacity of a borrower to fully service a loan over the full term is realistically assessed and stress-tested.

The current credit policy has been in effect since 2009 to ensure consistency and best practice across the sector by providing a clear evidence-based rationale for decisions on loan applications. All applicants are now assessed according to the same criteria and independent scrutiny. Their ability to pay at the time of application, and according to prevailing interest rates, is assessed and a variety of stress scenarios are also applied. It is the case that the rate of refusal of applications has increased since the credit policy was introduced. However, it is also clear that the loans issued under that credit policy are more likely to be fully performing. I am happy that the current policies are fair and adequately meet the needs of prospective borrowers.