Written answers

Wednesday, 3 February 2021

Department of Housing, Planning, and Local Government

Home Loan Scheme

Photo of Pádraig O'SullivanPádraig O'Sullivan (Cork North Central, Fianna Fail)
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308. To ask the Minister for Housing, Planning, and Local Government the measures he is taking to ensure that persons who applied for the Rebuilding Ireland home loan scheme are not being stopped from drawing down approved loans due to the fact they are temporarily on the employment wage subsidy scheme; and if he will make a statement on the matter. [5880/21]

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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The Rebuilding Ireland Home Loan scheme remains open for business. All local authorities are receiving and processing RIHL applications and are incorporating increased flexibility to accommodate applicants during the COVID 19 Pandemic. 

As is the case with any lender, local authorities must lend mortgages on a prudent basis, taking into account the most recent income and employment data available. Importantly, this is both for the protection of the lender and the borrower, in particular to seek to ensure that borrowers are not left with unsustainable debt burdens, as a mortgage is a long-term financial commitment. It would not be appropriate to lend when there is an identifiable risk that the person’s income and ability to pay might not return to the level required to support the borrowing requested.

Where such persons are approved for a RIHL loan, draw down would not commence until their unsupported income post Temporary Wage Subsidy Scheme (TWSS) has returned to the level specified in the original application for a period of time, usually up to three months. This is line with the requirement to lend prudently. 

This is not a blanket ban and local authorities can use their judgement and knowledge of local employers to advance loans to applicants before the end of this three-month period, where appropriate. This also applies to the successor scheme the Employment Wage Subsidy Scheme (EWSS). There are further exceptions to this approach. In the case of a joint application where only one party is on TWSS or EWSS, the application can also proceed to drawdown if repayment capacity can be assured based on the other person’s income. For applicants whose post-TWSS/EWSS income is lower (e.g. due to reduced hours) than stated on their application, their application can be re-assessed to determine the most appropriate borrowing amount for them.

In addition, persons currently on the TWSS/EWSS can continue to apply for a RIHL mortgage based on their pre-TWSS/EWSS Income. This will provide clarity to applicants regarding their eligibility for the loan amount and will enable them to commence the property search.

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