Written answers

Tuesday, 22 March 2022

Department of Housing, Planning, and Local Government

Housing Policy

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

335. To ask the Minister for Housing, Planning, and Local Government the status of his Department's engagement with an organisation (details supplied) with regard to the status of bank debt versus State debt in the affordable housing fund and the shared equity loan; and the implications for the taxpayer if the banks demand that their debt takes priority over the State equity share in cases of default by the home buyer. [14363/22]

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Affordable Housing Act 2021, the provisions of which I commenced in August and September 2021, laid the foundation for two new affordable purchase schemes: the first to be delivered via Local Authorities and the Land Development Agency, and the second a national 'First Home' shared equity scheme supporting purchases in the private market. Together these two schemes will support the purchase of 36,000 homes under the Government's Housing for All strategy.

On the basis that the purchaser of a home will generally require a mortgage to secure a home, I can confirm that in the development of both schemes, my Department is engaging with the Banking and Payments Federation Ireland and its members.  As the First Home Scheme will be delivered via a strategic partnership between the State and participating mortgage lenders, I can confirm that all parties are working with a view to deploying the scheme by the end of Q2 this year.

Both of the affordable purchase schemes will use an equity support model to assist eligible purchasers.  In the case of Local Authority Affordable Purchase, this equity stake will be equivalent to the reduction in price from the full market value of the home and the stake will be held by the Local Authority.

In the case of the national First Home scheme, the equity stake will be the funding provided to bridge the gap between someone's maximum mortgage and the price of a new home (within regional price ceilings).

Under both schemes the purchaser of the home can redeem or ‘buy out’ this equity stake at a time of their choosing, but there will be no general requirement to do so. If the purchaser chooses not to redeem the equity stake while living in the home, the holder of the stake can do so when the property is sold, or transferred, or after the death of the owner.

It is envisaged that purchasers will use bank mortgages or the Local Authority Home Loan with these schemes, just as in any home purchase, so the equity stake will therefore rank behind whatever loan is secured on the property. The equity support is not a loan, a second mortgage, or any form of 'State debt' and does not take precedence over the debt on the property.

Comments

No comments

Log in or join to post a public comment.