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. [45677/12]

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 the borrower may be reasonably expected to sustain the loan over the full term. Of equal importance, in view of recent developments in the domestic property market, is the imperative for a local authority to ensure that prudence and pragmatism are applied to all aspects of the management of its housing loans book. In a time of limited resources deploying those resources in a focused and effective manner ensures the management of its loans portfolio can be achieved as efficiently as possible.

The current credit policy has been in place since 2009. It was deemed appropriate at that time to update the elements associated with local authority lending and to have a homogenous regime in place that ensured best practice was followed across the sector. All applicants are now assessed according to the same criteria, and their applications subjected to the same independent scrutiny. It is desirable to make adequate lending provision available to local authority tenants who wish to avail of the tenant purchase schemes, while also adhering to prudent lending practices, and the current guidelines achieve equitable consideration of all applications. While the rate of refusal of applications has increased it is also clear that the loans issued since the introduction of the revised credit policy are more likely to be fully performing. I am happy that the current mortgage loan model is fair, adequately meets the needs of prospective borrowers and facilitates participation in housing acquisition initiatives such as the tenant purchase schemes.