Darragh O'Brien (Dublin Fingal, Fianna Fail)
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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: (1) a scheme to be delivered via Local Authorities and the Land Development Agency, and (2) a national 'First Home Scheme' supporting purchases in the private market. Together these two schemes will support the purchase of 36,000 affordable homes under the Government's Housing for Allstrategy.

Both of these 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 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 under the Central Bank Mortgage Measures and the price of a new home (within regional price ceilings reflective of median first-time buyer prices). Subject to final approvals, equity under the First Home Scheme is to be funded by the State and participating mortgage providers on a 50:50 basis and will be held by a Special Purpose Vehicle (the First Home Scheme Ireland DAC).

For both schemes contractual arrangements will be put in place between the equity holder, be it a local authority or the First Home scheme, and the purchaser. These contracts will fully detail the rights and responsibilities of the signatories and will contain the necessary covenants to fully protect the State’s interest.

The State’s interest will be registrable as a beneficial interest in the Land Registry as an act of the homeowner affecting the dwelling. Under both schemes, the purchaser of the home can redeem or ‘buy out’ this equity stake, in full or in part, at a time of their choosing. Since the equity stake will be redeemed at the current market price of the home, there is potential for its value to both rise and fall, though over the long term it is expected that market prices will rise. This brings both risk and benefit for the holder of the equity, but the potential risk is proportionate to the size of the equity stake in the home, and in the case of the jointly funded First Home Scheme the risk is shared 50:50 by the State and participating mortgage lenders.