Pearse Doherty (Donegal South West, Sinn Fein)
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229. To ask the Minister for Environment, Community and Local Government if he is aware of a procedural agreement that exists between lenders and approved housing bodies in respect of the mortgage to rent scheme in which cases are exited from the scheme and subsequently not offered to the approved housing body panel for consideration without at least a 15% reduction on the open market value of the property; of the hugely negative impact that such an agreement has on the likelihood of individual applications being successful under the scheme; and if he will make a statement on the matter. [40911/15]

Alan Kelly (Tipperary North, Labour)
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The Approved Housing Body (AHB) Mortgage to Rent Scheme is now established as part of the overall suite of social housing options and an important part of the arrears resolution process. The Mortgage to Rent Scheme is not intended as a solution for the vast majority of arrears cases. The transition from being a homeowner to a social housing tenant is a major one for families. The Scheme relies on the financial institutions to propose suitable properties, with the Housing Agency making a determination as to whether the agreed eligibility criteria have been met. The financial viability of particular transactions, for either the lenders or the AHBs, are commercial decisions to be taken by the individual bodies concerned.

As part of my Department’s on-going process of engagement with the relevant stakeholders involved in the operation of the Scheme, a protocol between all stakeholders was agreed and came into operation in June 2014. The protocol is intended to minimise delays in the process; to ensure that the borrower is involved from the outset; and is kept informed of progress throughout. A key objective of the protocol is to ensure that cases which are unlikely to be financially viable for the parties concerned are identified as early in the process as possible and withdrawn from further consideration. Such cases would generally include instances where the funding available to the AHB would not support the purchase of the property unless a discount in excess of 15% of the Open Market Value (OMV) was provided by the lender. However, the protocol provides that such cases can be considered by a lender should they so wish.

The package of commitments on mortgage arrears announced by Government in May 2015 included a number of amendments to the AHB Mortgage to Rent Scheme which will enable more properties to qualify for the Scheme, and make it more flexible and accessible to borrowers. Amendments made with effect from 1 July 2015 include increases in the valuation thresholds for properties, flexibility in relation to the size of properties which qualify for the scheme and amendments made to allow borrowers with marginal positive equity to be considered. In addition, the financial support available to AHBs for Mortgage to Rent cases has been increased. My Department continues to keep the operation of the Scheme under review.