Mortgage Providers Refusing Application due to LIHAF Scheme

Shoden

Hi,

Has anyone else come across the issue of various mortgage providers not letting you go forward with the application because the buyer is making use of the LIHAF Scheme? The LIHAF Scheme is basically 20k off for qualifying applicants in qualifying developments. Two mortgage providers have told me that they don't deal with applications making use of this. This is particularly gauling because the scheme is designed to make it easier to buy.

Thanks in advance!

Dolbhad

Shoden wrote: »

Hi,

Has anyone else come across the issue of various mortgage providers not letting you go forward with the application because the buyer is making use of the LIHAF Scheme? The LIHAF Scheme is basically 20k off for qualifying applicants in qualifying developments. Two mortgage providers have told me that they don't deal with applications making use of this. This is particularly gauling because the scheme is designed to make it easier to buy.

Thanks in advance!

I’ve friends who bought in the Glanmire, Cork with LIHAF scheme with PTSB. I think the issue is more it’s a new thing and banks didn’t know anything about it or how it worked. Their broker was clueless but they used a solicitor who acted for a few other people in the estate so she was familiar with the LIHAF scheme. Actually it was their solicitor who flagged the scheme to them in the first place.


All that was required was a declaration to the council with paylips and rental agreement. Once the council approved them, then their solicitor sent the Draft Deed of Transfer to the bank to explain the scheme etc and they had no issues at all. A new loan offer was issued in light of that. They are now in the house so funds have been drawn down.

Have a chat with your solicitor. If you don’t have one yet, maybe when your talking to solicitors ask if they are familiar with the LIHAF scheme. It’s fairly new so you might be better using a solicitor who may know the estate you are buying in.

We actually have the same solicitor as them so I can always PM details.

Shoden

Dolbhad wrote: »

I’ve friends who bought in the Glanmire, Cork with LIHAF scheme with PTSB. I think the issue is more it’s a new thing and banks didn’t know anything about it or how it worked. Their broker was clueless but they used a solicitor who acted for a few other people in the estate so she was familiar with the LIHAF scheme. Actually it was their solicitor who flagged the scheme to them in the first place.


All that was required was a declaration to the council with paylips and rental agreement. Once the council approved them, then their solicitor sent the Draft Deed of Transfer to the bank to explain the scheme etc and they had no issues at all. A new loan offer was issued in light of that. They are now in the house so funds have been drawn down.

Have a chat with your solicitor. If you don’t have one yet, maybe when your talking to solicitors ask if they are familiar with the LIHAF scheme. It’s fairly new so you might be better using a solicitor who may know the estate you are buying in.

We actually have the same solicitor as them so I can always PM details.

I appreciate the offer but my solicitor is familiar with the scheme. I just didn't think to get my solicitor to explain the process to the banks. I just accepted even though I don't agree that those banks didn't deal with it.

L1011

Is this the general LIHAF funding which providers for a "discount" on the house price (for everyone, I thought) or a site/proposal specific affordable housing project partially funded by LIHAF?

The former should basically be invisible and a bank shouldn't know let alone care. The latter may need a specific lender. 20k would suggest something like the latter but I know of a local scheme that is an 18k "discount" on just the general infrastructure funding.

Dolbhad

L1011 wrote: »

Is this the general LIHAF funding which providers for a "discount" on the house price (for everyone, I thought) or a site/proposal specific affordable housing project partially funded by LIHAF?

The former should basically be invisible and a bank shouldn't know let alone care. The latter may need a specific lender. 20k would suggest something like the latter but I know of a local scheme that is an 18k "discount" on just the general infrastructure funding.

It is a discount if you meet a criteria and applies only to specific houses in the estate. If you sell the house within 5 years, there is a clawback possible depending on the sale price. The difference here is the Council are party to the deed of transfer and have in the deed the clause in relation to the clawback.

The issue my friends encountered was their bank was afraid that the council clawback could take priority over the mortgage. Once the bank saw the deed and had the clawback explained, they were happy.

Shoden

Dolbhad wrote: »

It is a discount if you meet a criteria and applies only to specific houses in the estate. If you sell the house within 5 years, there is a clawback possible depending on the sale price. The difference here is the Council are party to the deed of transfer and have in the deed the clause in relation to the clawback.

The issue my friends encountered was their bank was afraid that the council clawback could take priority over the mortgage. Once the bank saw the deed and had the clawback explained, they were happy.

Three banks I've spoken with have had an issue with it so far. They plain won't engage in relation to the scheme.