Am I eligible for the community mortgage loan?

Housing Minister Darragh O’Brien has announced an expanded new local authority home loan scheme, increasing eligibility for those who can apply.

The new regulations will make it easier for singles to qualify for a state-guaranteed mortgage for a new, used or build-your-own home.

A “fresh start” principle also applies, which means that people who are divorced or separated and have no interest in the family home, or who have been the subject of insolvency proceedings, will also be able to present a demand.

Below are answers to some of the questions you might have.

Q. What is the municipal mortgage loan?

A. The LAHL program is the new name for the Rebuilding Ireland (RIHL) home loan program it replaces and is effective today. Funded by the government, loans are issued through local authorities and the program is open to first-time buyers – and “fresh start” applicants – with low or modest incomes who cannot obtain sufficient financing from commercial lenders to purchase properties. new or used or to build their own house.

Q. Am I eligible?

A. In addition to being a first-time buyer – or a Fresh Start candidate – you must be between the ages of 18 and 70 and have had continuous employment for at least two years, as a primary breadwinner or have continuous employment. for at least a year, as secondary support.

Due to Covid-19, these requirements have been temporarily relaxed, so that you could still qualify for a loan if there were periods when you were not in continuous employment due to Covid-19.

However, multiple casual jobs will not be considered eligible and if you are self-employed you will need a minimum of two full year accounts.

You must also provide proof of insufficient funding offers from two banks or building societies, and you must consent to an Irish credit bureau check.

Q. What is the maximum I can borrow and earn to qualify?

A. Homes purchased under the program cannot have a value greater than € 320,000 in Dublin, Cork, Galway, Meath, Kildare, Louth and Kildare and € 250,000 elsewhere. Single applicants cannot have an income greater than € 65,000 if they are looking to buy a house in the property price areas of € 320,000. The income ceiling for co-applicants is € 75,000 at the national level.

Q. What kind of interest rate are we talking about?

A. When a 0.25% reduction in interest rates on loans from the RIHL scheme (and future loans under the LAHL scheme which has yet to be launched) was announced last September, the ministry said that for loans with terms of up to 25 years, a fixed interest rate of 2.495% applied. And they said that for loans with terms of more than 25 to 30 years, a fixed interest rate of 2.745% applied.

The mortgage loan insurance premium (MPI) was then 0.555%, bringing the overall cost of the mortgage product to 3.05% for loans with a term of up to 25 years and to 3.3% for loans with terms of more than 25 years and up to 30 years.

Q. What deposit do I need?

A. The maximum loan amount under the RIHL was limited to 90% of the market value of the property or, in the case of self-built properties, 90% of the total construction costs. This means that you must raise 10% of your own resources and that a minimum of 30% of the amount of this deposit must come from substantial and regular savings. A verifiable record of the rent payment can be considered the equivalent of saving.

Q. Can I apply for a loan from different municipalities?

A. Under the old RIHL program, which is supposed to be almost identical to the LAHL program, you could apply to more than one local authority if you completed an application form for each local authority you applied to and you applied to follow their application process. You could only borrow one RIHL though, and you had to buy or build a property yourself in the local authority area you borrowed from.

Q. As it is backed by the government, does that mean the same warnings about private sector home loans won’t really apply here?

A. No. The same warnings apply. They include the fact that if you don’t meet your repayments you risk losing your home, the cost of your monthly repayments can go up, and you may have to pay fees if you prepay a fixed rate loan. Also, if you don’t meet your loan repayments, your account will be in arrears and this can affect your credit rating, which can limit your ability to access credit in the future.