Written answers

Wednesday, 11 November 2020

Department of Housing, Planning, and Local Government

Home Loan Scheme

Photo of Gerald NashGerald Nash (Louth, Labour)
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95. To ask the Minister for Housing, Planning, and Local Government if local authorities are directly funded the actual cost to the authority of funding and administering the Rebuilding Ireland home loan scheme; if the scheme creates a contingent liability on the balance sheet of the local authorities; and if he will make a statement on the matter. [35569/20]

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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Local authorities offer fixed-rate annuity finance to eligible Rebuilding Ireland Home Loan (RIHL) borrowers at rates of 2.745% and 2.995% per annum, for twenty five and thirty years respectively. There is an additional mortgage protection insurance premium of 0.555%.

The 2.745% (2.995%) interest charged to RIHL borrowers can be broken down as follows:

- Local authorities borrow from the Housing Funding Agency (HFA) to finance their lending under the Rebuilding Ireland Home Loan. Borrowing costs relating to the financing of the RIHL scheme by the HFA are 1.50% for 25-year fixed mortgage and 1.75% for 30-year fixed mortgage.

- There is a contribution (0.995%) to the Local Authority Mortgage Arrears Resolution Process (LA MARP) Premium Fund. The LA MARP Premium Fund was established in 2012 to support local authorities in dealing with the shortfalls that arise in resolving unsustainable arrears.

- Finally there is an administration fee retained by the local authority of 0.25%.

Monies borrowed by the local authorities to finance RIHL lending are a liability to the local authority, as is the case for any borrowing by local authorities.

The final decision on loan approval with the RIHL is a matter for the relevant local authority and its credit committee on a case-by-case basis. Decisions on all housing loan applications must be made in accordance with the Regulations establishing the scheme and the credit policy that underpins the scheme, in order to ensure prudence and consistency in approaches in the best interests of both borrowers and the lending local authorities.

Photo of Gerald NashGerald Nash (Louth, Labour)
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96. To ask the Minister for Housing, Planning, and Local Government the number of Rebuilding Ireland home loans currently in arrears and over three months by local authority in tabular form; if bad debt provisions under this scheme are carried by the local authorities or another agency; and if he will make a statement on the matter. [35570/20]

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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My Department publishes quarterly statistics on local authority mortgage arrears on its website on the following link: , which shows data up to 30 June 2020. This dataset provides information on arrears on all local authority mortgage lending, including the Rebuilding Ireland Home Loan (RIHL).

Separately, the Department collects information on arrears on the RIHL. Provisional data for 31 August shows that 12 RIHL loans were notified as being in arrears of more than 90 days, as set out in the table below:

Local Authority with RIHL Loans in arrears of more than 09 Days Number of loans
Dublin City Council 7
Kildare County Council 3
South Dublin County Council 1
Wexford County Council 1
Total 12

Bad debt provisions under this scheme are carried by local authorities as they are the lender. However, there is a local authority mortgage protection insurance scheme in place, and this may provide recourse for local authorities if the reason for non-repayment by the borrower is covered by the insurance (broadly speaking death or disability are the main issues covered).

The final decision on loan approval with the RIHL is a matter for the relevant local authority and its credit committee on a case-by-case basis. Decisions on all housing loan applications must be made in accordance with the Regulations establishing the scheme and the credit policy that underpins the scheme, in order to ensure prudence and consistency in approaches in the best interests of both borrowers and the lending local authorities.

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