David Cullinane (Waterford, Sinn Fein)
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242. To ask the Minister for Environment, Community and Local Government if different local authorities can derive different interpretations from the implementation of the incremental purchase scheme; and if he will make a statement on the matter. [16837/16]

David Cullinane (Waterford, Sinn Fein)
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243. To ask the Minister for Environment, Community and Local Government if he is aware of an anomaly that exists under the incremental purchase scheme in that an income of €15,000 per year is the minimum required to make an application but a minimum of €25,000 per year is required for tenants wishing to use the local authority house purchase loan scheme; if it is therefore possible to qualify for the 60% discount for earning between €15,000 and €20,000 and to apply under the latter scheme with a €25,000 minimum earnings per year requirement; and if he will make a statement on the matter. [16838/16]

Simon Coveney (Cork South Central, Fine Gael)
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I propose to take Questions Nos. 242 and 243 together.

The new Tenant (Incremental) Purchase Scheme came into operation on 1 January 2016. The Scheme is open to eligible tenants, including joint tenants, of local authority houses that are available for sale under the Scheme. To be eligible, tenants must meet certain criteria, including having a minimum reckonable income of €15,000 per annum.

The new scheme is a national scheme and the terms and conditions are set down in Part 3 of the Housing (Miscellaneous Provisions) Act 2014 and prescribed in the Housing (Sale of Local Authority Houses) Regulations 2015 and the associated Ministerial Income Directions. The consideration of individual applications and the determination of eligibility under the scheme is a matter for the local authority concerned in accordance with the relevant legislative provisions and the guidance underpinning the scheme.

The financing of any house sold under the Tenant (Incremental) Purchase Scheme is a separate matter from the eligibility criteria for the scheme.  In order to participate in the scheme, the tenant must, in the first instance, meet the eligibility criteria as set out in the relevant legislation, including having a minimum reckonable income of €15,000 per annum. If the tenant is deemed eligible under the scheme, he or she may fund the purchase of a house from one, or a combination of, own resources or a mortgage provided by a financial institution or a local authority house purchase loan.

The terms and conditions governing the operation of standard annuity mortgages provided by local authorities to qualifying first time buyers are set out most recently in the Housing (Local Authority Loans) Regulations 2012. A copy of the Regulations is available at the following link: .

Article 5(b) and (c) of the regulations provide that loans shall not be available in the case of a single borrower, where the annual gross income is more than €50,000 nor in the case of a joint application, where the combined gross income of the borrowers is more than €75,000. The Regulations do not prescribe a minimum gross income for loan applicants.

However, all loans must be issued in accordance with the statutory Credit Policy issued in 2009 in accordance with the Housing (Local Authority Loans) Regulations 2009, in order to ensure lending prudence and to assist local authorities across the sector to engage consistently in responsible mortgage lending, in the best interest of borrowers and local authorities alike. This Credit Policy determines that all decisions in relation to loans are made based on a borrowers’ capacity to repay the loan, credit history and savings record. The final decision on loan approval is a matter for each local authority and its credit committee on a case-by-case basis.

The new Tenant (Incremental) Purchase Scheme is in the early stages of implementation and my Department is monitoring the operation of the scheme in consultation with housing authorities. In line with the commitment in the new Programme for a Partnership Government to make the scheme more attractive for social housing tenants and to raise new funds for housing development, I intend to undertake a review of the scheme following the first 12 months of operation. I will bring forward any changes to the terms and conditions of the scheme which are considered necessary based on the evidence gathered at that stage.