1. Local Authority Affordable Housing Purchase Scheme
This affordable housing scheme is to help Households which, using their combined deposit and their approved maximum mortgage, cannot afford the home at its open market value. These newly built homes will be in areas where housing needs and affordability are an issue. This affordable housing scheme will primarily be for first-time home buyers with the greatest affordability challenges. Provision is also made for:
Divorced or separated individuals who do not retain an interest in a home previously owned with their former spouse/Civil Partner
A limited category of second-time buyers (those who purchased previously but whose home is now demonstrably too small for their household needs); &
Applicants who previously purchased a dwelling but who sold it or became divested of it as part of insolvency/bankruptcy proceedings.
Applicants must have a legal right to reside and work in the State and be able to demonstrate that they are habitually resident in Ireland.
Who Qualifies for the Local Authority Affordable Housing Purchase Scheme?
To qualify for this affordable housing scheme, you must meet the criteria set down by your own local authority (which differs significantly across the Country).
The affordable purchase price* for the properties will be discounted on the market value and based on the specific purchasing capacity of eligible applicants.
*The price you pay for your new home and the equity share the local authority takes in it are calculated by the local authority. This calculation takes into account your maximum mortgage capacity and the minimum price set for the home by the local authority. These calculations are done in accordance with regulations. The maximum equity share the local authority will take in your home is 40% and the minimum is 5%.
The purchasing capacity of applicants will be calculated as the combined total of:
Maximum mortgage capacity, generally 4 times gross household income, plus,
A minimum deposit of 10% of the affordable purchase price, plus,
In limited circumstances, any relevant savings, i.e., any relevant savings** in excess of the combined sum of the required deposit amount plus €30,000 may be taken into account.
** Applicants who have savings above a certain amount, may not qualify for the scheme. Applicants can have the money to cover the deposit on the home and an additional €30,000. Any savings above this amount is added to the applicant purchasing power and if this purchasing power exceeds 95% of the market value of the home, the application is not eligible for the scheme.
How Do I Apply for the Local Authority Affordable Housing Purchase Scheme?
Each local authority introduces its own affordable housing scheme and manages the application process. When homes are available under the scheme they will be advertised on the local authority’s website and in a local newspaper. The advertisement will include details about the scheme including how and when to apply. You apply for affordable homes as they become available and are advertised, there is no central application system.
In most cases, you will apply online where you input your information and upload any additional documentation. In the application, you may need to:
Provide your personal information, such as, your name, date of birth and PPS number
Confirm you are a first-time buyer or a fresh-start applicant
Declare your gross annual income for the previous 12 months
Provide evidence of a deposit and any savings, for example, bank statements
Provide evidence of how you are going to pay for the home, for example, mortgage approval in principle or a mortgage calculator
You should apply for homes that you can afford with the scheme and that suit the size of your household. You must submit your application by the closing date for the scheme.
Can I buy back the local authority’s equity share in my home?
You must buy back the local authority’s equity share in your home after 40 years. You can buy it back before then and you can make repayments at any time – your Financial Advisor can explain why this makes good financial sense to do so where you have affordability. You can buy back the full equity share in one payment or pay it back partially as you can afford to. However, the minimum repayment is €10,000.
If you decide to sell your home, you must pay off the equity share in your home. If you die, the equity share must also be paid off.
The equity share in your home is a percentage of the market value of your home. So, if property prices increase, the amount you have to pay back will increase. For example, if you bought your property in 2023 for €380,000 and the local authority provided equity of 20% or €76,000 and you want to buy back the equity share in 2025 when the property is valued at €400,000, you will have to pay 20% of this, which is €80,000.