Written answers

Wednesday, 11 March 2015

Department of Environment, Community and Local Government

Tenant Purchase Scheme Eligibility

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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138. To ask the Minister for Environment, Community and Local Government if he will ensure an appropriate loan scheme is available for persons in receipt of social welfare payments such as invalidity payment, to enable them to purchase their local authority house under the new tenant purchase scheme that is being proposed, whereby these tenants are currently paying more in rent than they would on a mortgage on a monthly basis; and if he will make a statement on the matter. [10658/15]

Photo of Alan KellyAlan Kelly (Tipperary North, Labour)
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Part 3 of the Housing (Miscellaneous Provisions) Act 2014 provides for a new scheme for the tenant purchase of existing local authority houses along incremental purchase lines. The Government’s Social Housing Strategy 2020, published in November 2014, includes a commitment to introduce the new tenant purchase scheme by the second quarter of 2015. Full details of the new scheme will be set out in regulations that I will make advance of its introduction.

Currently, tenants are not precluded from tenant purchase by virtue of being social welfare recipients. However, tenants seeking to fund the purchase through loan finance from the housing authority must adhere to the terms and conditions that apply to such loans, which are set out in the Housing (Local Authority Loans) Regulations 2012 which are available on my Department’s website:

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The Housing (Local Authority Loans) Regulations 2009 provide for the issuing of written guidance in the form of a credit policy for the processing of loan applications and the making of loans by all local authorities. The credit policy, introduced with these Regulations, underpins local authority lending and ensures prudence and consistency in approach.

As part of the loan application procedure, the Housing Agency provides an underwriting and support service to all local authorities. This shared central service processes loan applications, carries out credit checks and issues a recommendation to the local authority on each loan application in accordance with the credit policy. The final decision on loan approval is a matter for each local authority and its credit committee on a case-by-case basis.

House purchase loans are not, as a general rule, available to those in receipt of unemployment/social welfare benefits. However, where there is a primary income of a permanent waged/salaried nature, and where the secondary income is from the Department of Social Protection, then long term social welfare payments can be considered, provided the long term nature of the payment is confirmed by the Department of Social Protection or other relevant Government Department. The final decision on whether or not to approve a loan in a particular case lies with the relevant housing authority, which must satisfy itself as to the borrower’s capacity to service the loan over its full term.

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