Barry Cowen (Offaly, Fianna Fail)
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267. To ask the Minister for Housing, Planning, Community and Local Government the way the procurement and tendering process for the new mortgage-to-rent scheme using private investors is intended to work. [8511/17]

Barry Cowen (Offaly, Fianna Fail)
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268. To ask the Minister for Housing, Planning, Community and Local Government when he expects the new mortgage-to-rent scheme involving private investors to be finalised and full details of the new scheme to be announced; and his plans to run a pilot or demonstration project of the scheme prior to a full scale launch. [8512/17]

Barry Cowen (Offaly, Fianna Fail)
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282. To ask the Minister for Housing, Planning, Community and Local Government further to commitments made publicly by the Minister of State, Deputy English, that credit unions would be able to invest in the proposed new mortgage-to-rent scheme, the consultation that took place specifically with them regarding this scheme; the legislative amendments which will be required to give effect to their participation; and when this is expected to be put before the Houses of the Oireachtas. [8680/17]

Simon Coveney (Cork South Central, Fine Gael)
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I propose to take Questions Nos. 267, 268 and 282 together.

The Review of the Mortgage to Rent Scheme for borrowers of commercial private lending institutions published on 8 February 2017, concludes that the current financial model of the scheme may not be capable of delivering the scale of successful cases that could benefit from the scheme over time. Currently, the MTR scheme relies on AHBs to purchase from lenders properties that have been voluntarily surrendered by eligible borrowers.

The Government has been actively exploring potential mechanisms that would facilitate investment in social housing, including the off-balance sheet potential of private institutional investment. A number of private equity firms have expressed an interest in purchasing mortgage debt portfolios from commercial banks with a view to exploring the potential for them to access the MTR scheme model for the borrowers in occupation of the mortgaged property.

One of the outcomes of the Review is that in order to test the operability of alternative funding models for the scheme, the Housing Agency will work with a number of financial entities who have come forward with an interest in working with the MTR scheme to progress a number of pilot alternative lease arrangements. In advance of these pilots, a targeted market testing exercise is currently underway by the National Development Finance Agency (NDFA), on behalf of my Department, to test the suitability of the proposed enhanced leasing arrangements to ascertain if they would be viable for a mortgage to rent cohort.

The agreed Programme for a Partnership Government recognises the potential role that credit unions can play in housing finance and supports the efforts of the Registrar of Credit Unions at the Central Bank to gradually lift current lending restrictions as appropriate, including for housing. The Programme further provides that we will investigate with all stakeholders how credit unions can support the delivery of social housing.

Conscious of the independence of the Central Bank in its regulatory role in respect of credit unions, bilateral engagement has taken place between my Department and the Department of Finance to consider the potential regulatory and legislative implications of credit union involvement in the social housing sector. I acknowledge the willingness of credit unions to actively seek a role in financing the delivery of social housing. I and my Department have had ongoing contact with the credit union movement to contribute to this process by providing necessary technical advice and support.

In the context of the expressed interest of credit unions in providing finance for the delivery of social housing, the potential scope for credit union involvement in the planned new MTR pilot projects is being examined. My colleague, Minister of State Damien English and my Department are currently consulting with credit union representatives in this regard.

Overall, these pilot projects are in a developmental stage and my Department is working with the Housing Agency to scope out the necessary terms and conditions that should apply. It is my intention that this scoping, together with the market testing being undertaken by the NDFA and consultation with other Government Departments responsible for policy and regulation relevant to the operation of the scheme, will be concluded in the coming weeks. At that point, I will be in a better position to set-out in more detail how the pilots will operate and how the private investors will be selected.

The Review of the MTR also included a commitment to undertaking a detailed financial assessment of the structure of the funding of the MTR scheme in advance of the budgetary process for 2018. The assessment will be informed by the early impact of the other actions proposed by the review, as well as the outcome of the experience with the pilot lease arrangements, and the availability of financial resources overall.