Changes being introduced to reflect rising cost of housing
First-time buyers will be able to withdraw loans from their local council for houses costing up to €360,000 under changes to a Government scheme for people who have been turned down for mortgages from a bank.
Housing Minister Darragh O’Brien is bringing a memo to Cabinet seeking to increase housing price and income limits set out under the Local Authority Home Loan scheme.
The initiative has been in place for a number of years. City and county councils provide funding to first-time buyers who have been turned down for mortgages by traditional lenders.
The changes to the scheme are being introduced to reflect the rising cost of housing in recent years.
“We want and need the scheme to be relevant in today’s housing market so we are increasing the house price limits for all local authorities,” a Government source said.
“We’re also increasing the income limits for applicants in each local authority. Emphasising the need to help single purchasers, the income limit on single applicants – which was increased this time last year in Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow – will be increased and will now be the same in all parts of the country,” the source added.
Under the changes to the scheme, the house-price limit will increase by €40,000 to €360,000 for people seeking loans from local authorities in Dún Laoghaire Rathdown, South Dublin, Dublin City, Fingal, Wicklow and Kildare.
The limit for houses in Galway City, Cork City, Louth, Meath, Galway County and Cork County will increase by €10,000 to €330,000.
In Limerick, Waterford, Clare, Wexford, Westmeath and Kilkenny it will increase by €50,000 to €300,000. All other local authorities will see the house-price limit increase by €25,000 to €275,000.
Meanwhile, income limits for a single person applying for a loan will increase to €70,000 nationwide and for joint applicants it will rise from €75,000 to €85,000 for the entire country.
In order to qualify for the scheme a first-time buyer must be employed for the last two years and have been turned down for a mortgage from two lenders. The loan can be used to purchase a new or second-hand home or to build a home.