Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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55. To ask the Minister for Housing, Planning, Community and Local Government if he will extend the terms and conditions of the mortgage to rent scheme to include local authorities as part of the review process of the scheme as an action in the rebuilding Ireland action plan for housing and homelessness in view of the very low level of engagement from housing agencies with the scheme in its current form; and if he will make a statement on the matter. [24976/17]

Simon Coveney (Cork South Central, Fine Gael)
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The review of the Mortgage to Rent (MTR) Scheme for borrowers of commercial private lending institutions, published on 8 February 2017, introduced a range of amendments to the eligibility criteria and administration of the scheme in order for it to work better for borrowers. It also concluded that the current financial model of the scheme may not be capable of delivering the scale of cases that could benefit from the scheme over time.

In parallel, Rebuilding Ireland acknowledges the scale of the current pressures in terms of new social housing supply and proposes more direct intervention by local authorities to expand and accelerate overall social housing supply particularly in the short term. An expansion of the MTR scheme whereby the local authority, as opposed to an Approved Housing Body, would acquire the property would impact on the capacity of local authorities to meet the ambitious targets around social housing supply.

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. They are seeking an alternative arrangement that would see the mortgaged property staying in the funding firm's ownership and the property itself leased back to the local authority in circumstances where the borrower is eligible for MTR and the borrower would therefore remain in their own home.

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 has been undertaken 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 objective is to explore what is available within the current market and to determine if this alternative model will benefit a greater number of households.

A detailed financial assessment of the structure of the funding of the MTR scheme will be undertaken 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.