New provisions to Local Authority Home Loan Scheme good news for buyers – Cummins

Changes to rules governing the Local Authority Home Loan Scheme will give more options and flexibility to house buyers, a Fine Gael Senator has said.

Fine Gael party spokesman on Housing, Local Government and Heritage Senator John Cummins was speaking after Minister for Housing, Local Government and Heritage Darragh O’Brien, informed Cabinet of significant improvements to the Local Authority Home Loan scheme.

The changes to the scheme, which come into effect on March 1^st, have been introduced to reflect the current housing market and will give single people in particular a better opportunity to access the scheme.

Under the new provisions of the scheme:

• The house-price limit will increase by €40,000 to €360,000 forfirst time buyers 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, GalwayCounty and Cork County will increase by €10,000 to €330,000.
• In Waterford, Limerick, 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.

In addition, 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.

“A rethink on the maximum income limits and maximum purchase price ceilings is something I have been highlighting for some time,” Senator Cummins pointed out. “The €250,000 ceiling for a house purchase outside Dublin, Cork and the commuter belt was too low and didn’t offer sufficient options to applicants.

“On 25th January I had a commencement matter in the Seanad where I called for the maximum income thresholds to be revised and increase to €85,000 for couples. I am glad to see this being done today. I’m also happy to see the individual threshold increase to €70,000 nationwide. There was never a justified reason to have a lower income threshold for those outside the commuter belt and I am glad this discrepancy has been rectified and that single persons on better incomes will be able to access the Local Authority Home Loan.

“The revised thresholds means more people will be able to access the Local Authority Home Loan if they find themselves unable to access finance through the pillar banks. The fixed rate mortgage for the term of the loan at 3.4% and 3.5% for 25 to 30 year terms is competitive and means individuals and couples have certainty on their payments for the entirety of the loan period which will be viewed positively, particularly in the context of the current environment.”